Login

I’m trying to understand how a potential de-dollarization trend might affect my small export business. We invoice exclusively in USD, and I'm worried about what a shift in reserve currency dynamics could do to our payment terms and currency risk.

I run a small export business and we invoice in USD. We added a small early pay discount to push receipts forward and now we reconcile FX once a week with a simple spreadsheet. So far nothing dramatic. Most buyers still pay in USD or via USD invoices. If more buyers try to settle in their local currencies we might need to renegotiate terms or add a currency clause.

Up to now the effect is muted for us we still collect mostly in USD. We did see two percent of invoices last year settle in non USD mainly with partners in the region which does not help cash flow. We keep pricing in USD and spot rates once a month and we fear a future where payments drift further or where banks push settlement in local currencies.

We looked at hedges briefly but the cost did not look worth it for a small exposure. Our bank quoted forwards for a portion of the annual receipts and the math did not justify the premium. In the end we kept a small FX cushion and did not commit to a full hedge plan.

I keep hearing about de dollarization in the mix of news but I am not sure that is the real problem for us. I worry more about whether a slower payment cycle and bigger credit risk from buyers could hit our margins before FX moves bite. Is the real issue the currency shift or the payment reliability and credit controls?

Login
Username:
Password:	Lost Password?
	Remember me