Romanian exporters use hedging as they want to play it safe against the leu, Business Standard says

Hedging refers to an investment made in order to reduce the risk of adverse price movements in a security, by taking an offsetting position in a related security, such as an option or a short sale.

Romanian-based steelmaker ArcelorMittal Galati together with the large naval yards, such as Aker Braila, are currently thinking of using hedging massively, this year. Rompetrol, Romania’s second largest oil producer, together with the country’s No. 1 aluminum maker Alro Slatina, are already using this type of investment.

Constanta Shipyard last year lost 1.5 million euros due to the fluctuations of the exchange rate. On the other hand, Alro Slatina used hedging last year and the final financial results were influenced by this measure, people close to the company said.

Source: NewsIn