Managing foreign exchange exposures in the context of ending the currency commitment of the CNB

This paper deals with problematics of managing foreign exchange risk during the period of the CNB's exchange rate commitment. The paper includes recommendations and suggestions of solutions for Czech export enterprises. Specifically, the paper recommends methods of alternative scenarios for quantifying foreign exchange risk during the period of foreign exchange intervention of the CNB. The elimination of transaction exposure is recommended by hedging via short-term forward contracts, i.e. one months, two months, three months forward. The elimination of pre-transaction exposure is advised by hedging with options contracts.