It’s necessary for businesses to mitigate currency risks: Dempo

Panaji: Goan businesses dealing in foreign exchange, particularly in the pharmaceuticals, shipbuilding, and tourism sectors, need to ensure they manage risks due to forex volatility, said Shrinivas Dempo, president of the Goa Chamber of Commerce and Industry, on Friday. Dempo, who was speaking at the Reserve Bank of India’s (RBI) forex awareness program, said that forex management is critical for sustained growth.

“For Goa’s tourism and shipping industries, which regularly engage with international clients, seamless forex transactions can improve cash flow, financial planning, and overall profitability,” he said. Dempo stated that Goa’s exporters, whether in manufacturing, services, or shipbuilding, should explore the use of digital forex platforms to optimise international payments, reduce forex conversion costs, and mitigate currency risks.

He also emphasised the importance of hedging forex risks through instruments such as forwards, options, swaps, and futures. “With the RBI’s continued efforts to make hedging tools more accessible and cost-effective, Goan businesses dealing in US Dollars or Euros can now safeguard their financial stability with structured risk management strategies,” he said.

He noted that geopolitical developments, particularly US trade tariffs and the Russia-Ukraine conflict, can impact exports. The prolonged Russia-Ukraine war significantly impacted Goa’s tourism sector. “The sharp decline in Russian and Ukrainian tourists has made it imperative for tourism industry to diversify its source markets and attract travellers from other regions,” he said.

He noted that the RBI’s active market interventions to stabilise the weakening Rupee help cross-border trade settlements. Dempo also urged Goan businesses to explore emerging global markets and invest in high-value product development that can be exported.