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Foreign exchange risk management of vietnam bank for agriculture and rural development (agribank)

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  • Foreign exchange risk management of vietnam bank for agriculture and rural development (agribank)

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VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL NGUYEN THI QUYNH AN FOREIGN EXCHANGE RISK MANAGEMENT OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (AGRIBANK) MASTER THESIS HA NOI,2021 i ABSTRACT Thesis Title: Foreign exchange risk management of Vietnam Bank for Agriculture and Rural Development (Agribank) Pages: 55 University: Vietnam National University - Hanoi Graduate School: International School Date: January.2021 Degree: Master Graduate Student: Nguyen Thi Quynh An Supervisor: Dr.Mai Anh Keywords: Bank, Exchange Rate Risk Management, Foreign Currency, Policy, Trading The demand for foreign currencies of corporate customers as well as the development of foreign currency business operations of commercial banks in the integration process is huge Consequently, Vietnamese banks in general as well as Vietnam Bank for Agriculture and Rural Development (Agribank) in particular must have the right direction in the current development trend to achieve high efficiency in business activities The general objective of the study is to assess the current situation of exchange rate risk management at Agribank, thereby proposing directions and solutions to enhance exchange rate risk management at the bank in the near future With the suitable methods and continuous efforts in exchange risk management at Agribank, a number of certain achievements have been obtained Profits from foreign exchange trading activities have continuously met the set targets, increased and stabilized over recent years Agribank does not face heavy losses due to exposure to risks in general and exchange rate risks in particular The bank’s foreign exchange trading operations also contribute to meeting customers’ diverse foreign currency payment needs, thereby promoting the bank’s other business activities such as national payment, foreign currency loans, guarantee, etc ii to attract more customers, limit risks and increase profits for the bank As a reputable bank with strong brand name in the banking industry in Vietnam, Agribank has obtained remarkable achievements However, there are still some shortcomings, such as the bank’s management system has not been clearly defined, there is no specific regulation on the coordination between front office and back office departments, there is no department to perform the function of analyzing and managing risks in foreign exchange trading The bank also lacks a system of managing transaction limits and management limits for customers, banking employees, and controllers, so the risks in foreign exchange trading are very high Based on those shortcoming, the author also gives some recommendations to improve exchange rate risk management at Agribank With the solutions given by the research to contribute to further completing and improving the efficiency of foreign exchange trading risk management at Agribank, the author hopes that in the coming years, Agribank will have significant changes in foreign exchange trading activities as well as risk management of these foreign exchange trading activities to contribute to bringing practical benefits to the system and a small part to the growth rate of the whole system of Agribank iii ACKNOWLEDGEMENT I would like to express my deep gratitude to my teacher, Dr Mai Duc Anh, who enthusiastically guided and helped me throughout the process of studying, researching and completing this research I would like to thank the teachers and lecturers at Vietnam National University - Hanoi, International School for their valuable comments to help me in the process of researching and completing the research I would like to express my sincere thanks to the leaders and officers working at Agribank for facilitating me to complete this research I hereby declare that this research is my own research work, not yet published anywhere All data used in this research are authentic information, subject to school regulations and academic integrity regulations Word count of the research is 13,968 words I accept all responsibilities for my declaration iv TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENT Error! Bookmark not defined TABLE OF CONTENTS v LIST OF TABLES viii SYMBOL MEANING ix LIST OF ABBREVIATIONS x CHAPTER 1: INTRODUCTION 1.1 Rationale of the study 1.2 Subject and scope of the study 1.2.1 Subject of the study 1.2.2 Scope of the study 1.3 Objectives of the study 1.3.1 General objective .2 1.3.2 Specific objectives 1.4 Significant contributions of the thesis 1.4.1 Theoretical contributions 1.4.2 Practical contributions .3 1.4.3 New contributions of the thesis .3 1.5 The structure of the thesis CHAPTER 2: THEORETICAL FRAMEWORK OF EXCHANGE RATE RISK MANAGEMENT IN THE BANKS 2.1 Foreign exchange trading by commercial banks 2.1.1 Concept of foreign exchange trading 2.1.2 Role of foreign exchange trading for commercial banks 2.1.3 Risk classification in foreign exchange trading 2.2 Overview of exchange rate risks of commercial banks .8 2.2.1 Concepts of exchange rate risk v 2.2.2 Classification of exchange rate risks by commercial banks 2.2.3 Factors affecting exchange rate risks of commercial banks 2.3 Exchange rate risk management of commercial banks .9 2.3.1 Concepts of exchange rate risk management 2.3.2 Role of exchange rate risk management for commercial banks .9 2.3.3 Content of exchange rate risk management 10 2.3.4 Exchange rate management tools 11 2.4 Factors affecting exchange rate risk management of commercial banks 13 2.4.1 Objective factors 13 2.4.2 Subjective factors 15 CHAPTER 3: RESEARCH METHODOLOGY 18 3.1 Data collection 18 3.1.1 Secondary data 18 3.1.2 Primary data collection 19 3.2 Data processing 20 CHAPTER 4: RESULTS AND DISCUSSION 21 4.1 Current situation of exchange rate risk management of Agribank in the period of 2017 - 2019 21 4.1.1 Process of exchange rate risk management 21 4.1.2 Details of exchange rate risk management 23 4.2 Factors affecting exchange rate risk management of Agribank 29 4.2.1 Objective factors 29 4.2.2 Subjective factors 30 4.3 Assessment of exchange rate risk management for the period of 2017 - 2019 of Agribank 33 4.3.1 Achievements 33 4.3.2 Shortcomings and causes .35 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 41 5.1 Conclusion 41 vi 5.2 Recommendations to improve exchange rate risk management of Agribank 42 5.2.1 Completing the system of departments in charge of exchange risk management 42 5.2.2 Strengthening the work of building and implementing a correct and effective customer policy 43 5.2.3 Improving professional qualifications of foreign exchange trading officials 44 5.2.4 Developing the information technology system to modernize the banking and information network 45 5.2.5 Enhancing banking operations related to foreign exchange trading .46 REFERENCE LIST 50 APPENDIX 1: SURVEYS FOR BANKING EMPLOYEES 53 APPENDIX 2: SURVEYS FOR CUSTOMERS 55 vii LIST OF TABLES Table 3.1 Sources of secondary data collection .18 Table 4.1 Agribank’s foreign exchange status for the period of 2017 - 2019 24 Table 4.2 Credit risk classification by grade and rating of Agribank 25 Table 4.3 Sales of spot trading foreign currencies in the period of 2017 - 2019 .26 Table 4.4 Revenue from forward transactions in 2017 - 2019 27 Table 4.5 Rate of risk provisioning 29 Table 4.6 Evaluation of the impact level of environmental factors 30 Table 4.7 Evaluation of the impact level of foreign exchange policy of the bank 30 Table 4.8 Evaluation of the impact level of banking organization 31 Table 4.9 Evaluation of the impact level of employee quality 32 viii SYMBOL MEANING < : Smaller > : Bigger $ : US Dollar ix LIST OF ABBREVIATIONS Agribank : Vietnam Bank for Agriculture and Rural Development EUR : Euro Dollar FX : Forex GBP : Great Britain Pound JPY : Japanese Yen L/C : Letter of Credit USD : United States Dollar VaR : Value at Risk VND : Vietnam Dong WB : World Bank x CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 5.1 Conclusion In the new era, the time of economic integration and development in the region and the world, foreign exchange trading has become increasingly important in the operation of Vietnamese commercial banks However, foreign exchange trading activities contain many risks such as: interest rate risks, liquidity risks, etc especially exchange rate risks Therefore, the completion of risk prevention tools in foreign exchange trading is essential in order to improve the quality of risk management at commercial banks The study has solved the research objectives including clarifying the theoretical basis of foreign exchange trading operations and risk management in foreign exchange trading of commercial banks; analyzing the current situation of risk management in foreign exchange trading and current solutions applying to Agribank; and finding out the reasons for existing limitations in the bank’s foreign exchange trading activities With the solutions given by the research to contribute to further completing and improving the efficiency of foreign exchange trading risk management at Agribank, the author hopes that in the coming years, Agribank will have significant changes in foreign exchange trading activities as well as risk management of these foreign exchange trading activities to contribute to bringing practical benefits to the system and a small part to the growth rate of the whole system of Agribank 41 5.2 Recommendations to improve exchange rate risk management of Agribank 5.2.1 Completing the system of departments in charge of exchange risk management As mentioned above, the bank also lacks a system of managing transaction limits and management limits for customers, banking employees, and controllers, so the risks in foreign exchange trading are very high The bank has not completely developed a mechanism to manage and prevent risks in foreign exchange trading Due to the lack of a specialized division in risk analysis and management appropriately, along with a sense of risk aversion, the bank does not dare to carry out interest rate difference, exchange rate difference or arbitrage operations to seek more profit for the bank Therefore, foreign exchange transactions among branches in the bank and with foreign bank branches are more difficult In order to manage risks in foreign exchange trading activities in the bank according to the organizational structure of some developed countries in the world, in addition to the direct customer transaction department (front office) and the support department (back office), it is necessary to have a department to inspect, monitor and manage risks such as internal control department, analysis department, risk management and market inspection department, etc Currently, Agribank has an internal control department, but it is necessary to have a department for analysis, risk management and market inspection The foreign exchange market is vibrant and changing constantly in recent years Exchange rates fluctuate unpredictably, so to limit risks in general and exchange rate risks in particular, it is required to have a market analysis department to provide strategies and predict exchange rate fluctuations in a timely and effective manner The task of the analysis department is to manage the bank’s foreign currency status, to research the market to give accurate forecasts about exchange rate fluctuations, to help foreign exchange trading divisions to make the right decisions, limit risks and losses for the bank; research and develop products, business types, etc.; diversify 42 the bank’s business products and create tools to limit exchange rate risks; monitor and supervise foreign exchange trading activities for each business official, and check the permitted transaction limits 5.2.2 Strengthening the work of building and implementing a correct and effective customer policy As mentioned in the previous chapter, employees and officials engaged in foreign exchange trading is limited in quantity, they have concurrently many different professional operations so they cannot focus on one area The training operations to improve employees’ knowledge and expertise on foreign exchange trading are not effective, because it requires understanding, extensive knowledge and takes a long time to train and study for new employees Moreover, nowadays, there are more and more new commercial banks, the competition of banks is increasingly fierce, the problem of capital mobilization as well as business growth in the current difficult economic conditions is a difficult problem without specific solutions of commercial banks It is vital to build a correct and effective customer policy as a long-term strategy of commercial banks and this is a direct decision to the bank’s sales and profits Most Vietnamese businesses today have not changed their old habit of using cash mainly in USD, they still business in traditional method, in which they buy and sell when they are in need Therefore, Agribank’s policies need to combine many different tools to diversify foreign currencies Firstly, the bank should actively look for customers because of the emergence of many commercial banks, especially joint stock commercial banks and foreign bank branches, which are very active in providing new products and services accompanied by many incentives Therefore, Agribank needs to have a team to find, approach customers, introduce to customers new products and services useful for customers with many incentives attached Secondly, it is necessary to advertise, propagate and introduce the bank’s new products and services, highlighting the outstanding points of Agribank compared to other banks To be able to find potential customers with good finance is not easy 43 There is a need to equip banking employees with certain knowledge of the foreign exchange market for the purpose of advising customers to understand the benefits from the use of currency derivative instruments and different currencies Also, the bank should create conditions for customers to access authentic information sources and the most beneficial way to use them to minimize risks when exchange rates fluctuate The bank should also regularly contact and meet directly with customers to remove difficulties when using new products and services Thirdly, it is important to build a service style to work professionally, wholeheartedly, politely, thoughtfully, demonstrating knowledge of the market, of foreign exchange, and of legal documents This creates the bank’s prestige and trust in customer mind, thereby attracting more customers to the bank, creating a competitive advantage over other banks in the same area 5.2.3 Improving professional qualifications of foreign exchange trading officials As mentioned in previous chapter, the qualifications of banking employees doing business are still limited; employees have not been fully trained in foreign exchange trading operations Although the bank already has a team of qualified employees, due to the growing needs of the market, the modernization and complexity of the operations, the process of performing operations has not been highly effective In order to reach the position of the leading bank in foreign exchange trading activities, an extremely important factor is to focus on training a team of highly qualified banking employees specialized in foreign exchange trading, capable of keeping up with the development of science and technology level Therefore, one of the most important things to now is to improve working skills, risk management capacity, ability to accurately forecast the exchange rate fluctuations of the bank’s leaders They not only need to be proficient in their profession, but also have to be good at foreign languages, knowledgeable about international laws and regulations, actively cultivate and accumulate knowledge, research legal documents to comply with regulations processes, and prevent risks and losses for the bank 44 The bank should assign banking employees specialized in foreign exchange trading to study at training institutions at home and abroad to improve their ability to absorb, analyze, process information, have a sense of sensibility to handle difficult transaction situations effectively, and offer the best solutions for customers and the bank This is a difficult job requiring qualifications and experience, from which it can minimize exchange rate risks in foreign exchange trading, which can bring high profits for the bank It is not easy to make profit for the bank when its customers and partners in the market are highly specialized Therefore, in addition to training banking employees, it is necessary to have policies to promptly reward and encourage those employees’ working spirit and results The reward level is based on the achieved profit in order to encourage them to further enhance their abilities, to have a sense of responsibility for their work, etc., thereby bringing higher efficiency to the bank The bank also needs to regularly organize seminars, workshops, training courses on newly emerging transactions, and invite economic experts at the Head Office or the State Bank to guide and answer questions in the process of dealing with customers to help banking employees have the opportunity to expand their knowledge and improve their professional skills 5.2.4 Developing the information technology system to modernize the banking and information network As analyzed in the previous part, the bank’s management system has not been clearly defined, there is no specific regulation on the coordination between front office and back office departments, and there is no department to perform the function of analyzing and managing risks in foreign exchange trading In fact, the implementation and use of risk management software has not yet brought about the desired effect Information is an extremely important factor in any decision Whether or not the decision is correct depends a lot on whether or not the information is accurate, timely and complete Therefore, building an information 45 system to serve the bank’s foreign exchange trading is essential and must be done immediately for Agribank Recognizing the need for information technology, Agribank has paid attention to installing modern equipment in accordance with the requirements of foreign exchange trading activities such as computer systems updating news on exchange rates, interest rates fluctuating in the market and the State Bank of Vietnam, trading machines with modern application software for calculate and forecast changes in exchange rates, modern communication and transaction facilities such as telephone, fax machine, etc., to be able to transact with any bank in the locality and abroad Agribank has also set up a team of professional employees to analyze and make reports, evaluate and forecast the most accurately on the foreign exchange trading activities of the bank and other strategic partners, competitors in the market to minimize risks to the maximum level of banks However, Agribank actually does not have good risk management software such as: Kondor, Oracle Risk Manager, Bloomberg, etc., or supporting software such as Midas system for back office, etc The bank should consider installing software to see if it is suitable with the accounting regime that the bank is implementing or not 5.2.5 Enhancing banking operations related to foreign exchange trading Due to difficulties and shortcomings as mentioned above, banking operations related to foreign exchange trading should be enhanced as follows a Tracking foreign currency status Every day, the bank must set up a sheet to monitor the foreign currency status of each foreign currency, grasp the situation, detect risks in order to take timely measures to limit, avoid unnecessary losses to the bank Because when looking at the foreign currency monitoring sheet of the bank, banking employees can immediately see the bank’s foreign exchange trading activities The foreign currency position of each currency is used by the bank to measure the potential loss or gain in each change There are many methods to manage risk, but foreign 46 currency position management is still the traditional method Therefore, banks in general as well as Agribank in particular should carefully set up a sheet to monitor foreign currency status and consider this as a real exchange rate risk management tool b Diversifying derivative products Currently, almost all banks use spot operations With the strong exchange rate fluctuations, the constantly changing interest rates have affected the profit of foreign exchange trading activities as well as the business results of the whole bank Not only that, when customers transact with banks, they have to spend quite a high cost to own foreign currency to maintain their production and business Therefore, both the bank and its corporate customers are likely to face very high risks Diversifying operations to help prevent risks is really necessary in the future The bank should set up an advisory team that brings together its employees with a very good understanding of derivative contracts to provide detailed guidance to customers both in theory and practice With complicated economic situation, interest rates at banks are constantly changing, this is one of the tools that the State Bank uses to stabilize the exchange rate Therefore, Agribank use interest rate swap contract as the most effective exchange rate hedging contract, stabilizing interest rates and exchange rates c Enhancing the ability to forecast exchange rate fluctuations The exchange rate forecast as well as the direction of exchange rate fluctuations are very important in the management of exchange rate risks, and at the same time relying on those forecasts to make business decisions If the forecast is correct, the bank will prevent exchange rate risks and gain high profits, but if it is incorrect, it will cause serious and heavy losses for the bank Exchange rate forecasting methods can be divided into groups including fundamental forecasts, technical forecasts, time series forecasts, etc Each forecasting method has its own advantages and disadvantages while the changes in exchange rates are not easily explained This is sometimes due to the specific 47 economic and political characteristics of each country affecting the exchange rate policy, not due to the quality of the forecasting method Therefore, the bank’s foreign currency employees need to be qualified, experienced and able to judge d Diversifying types of foreign currencies in foreign exchange trading Changing the habit of international payment in USD in many businesses as well as many banks is not a simple thing More than 80% of international payments and transactions in the world still use the USD In Singapore, for example, the largest foreign exchange market in Southeast Asia, the US accounts for 70% of all spot transactions Or like some major commodity exchanges in the world such as the coffee exchange in London, the EUR and GBP are not alternatives to the USD The importers still pay and transact in USD and they are more secure with a strong currency like the USD which has become popular in transactions Vietnamese commercial banks, including Agribank, are not out of that situation, the USD is still a foreign currency that accounts for a large proportion in foreign currency transactions And the fact that compared to other currencies, the USD is the currency with the highest convertibility among strong currencies such as the EUR, the GBP, the JPY, etc However, it must be admitted that the diversification of foreign currencies is becoming an inevitable trend of countries around the world Diversifying foreign currency payments can help solve the pressure of the USD/VND exchange rate as well as the shortage of USD for payment of banks at times of foreign currency supply and demand pressure When diversifying foreign currencies, businesses will partly reduce the exchange rate risk In Vietnam, other currencies are not controlled by exchange rates like the USD, so exchange rate fluctuations are affected much faster than the USD That is why businesses and their partners always choose the currencies with the lowest risk to meet their payment needs In payment transactions, Vietnamese businesses still not have the habit of using derivative tools Therefore, it is necessary to diversify foreign currencies to develop derivative transactions, to disseminate certain knowledge to businesses and 48 people about measures to limit exchange rate risks, gradually reducing the pressure of depending on the USD, businesses not have to conduct their transactions through intermediary partners 49 REFERENCE LIST Allayannis, G W., Brown, G., & Klapper, F L (2001) Exchange rate risk management - Evidence from East Asia Working paper series - The University of Virginia, 01-09 Berger, A N., Hasan, I., & Zhou, M M (2010) The effects of focus versus diversification on bank performance: Evidence from Chinese banks Journal of Banking & Finance, 34, 1417-35 Brown, G W (2001) Managing foreign exchange risk with derivatives Journal of Financial Economics, 60(2-3), 401-448 Bryman, A (2012) Social research methods New York: Oxford University Press Crano, W D., Brewer, M B., & Lac, A (2015) Principles and methods of social research (3rd ed.) London and New York, NY: Routledge Dinh, T T H., & Kleimeier, S (2007) A credit scoring model for Vietnam’s retail banking market International Review of Financial Analysis, 16, 471-495 Dufhues, T (2003) Transformation of the financial system in Vietnam and its implications for the rural market - An updated Journal of Institutional Innovation, 7, 29-41 Honohan, P (2007) Dollarization and exchange rate fluctuation World Bank Policy Research, Working Paper, 4172 Köhler, M (2015 Which banks are more risky? The impact of business models on bank stability Journal of Financial Stability, 16, 195-212 Kousted, J., Rand, J., Tarp, F., Nguyen, D T., Nguyen, V H., Ta, M T., & Luu, D K (2005) From mono bank to commercial bank: Financial sector reforms in Vietnam Singapore: Institute of Southeast Asian Studies Lepetit, L., Nys, E., Rous, P., & Tarazi, A (2008) Bank income structure and risk: An empirical analysis of European banks Journal of Banking & Finance, 32, 1452-67 50 Matousek, R., Nguyen, T N., Stewart, C (2017) Risk Management of the Vietnamese Banking System: A Market Research Survey Proceedings of the Annual Vietnam Academic Research Conference on Global Business, Economics, Finance & Management Sciences Mishkin, F S (2004) Economics of Money Banking and Financial Markets New York: Pearson-Addison Wesley Nga, L T., Hien, D T T., & Chien, N M (2013) The impact of foreign exchange rate on inflation in Vietnam from 2000-2012 Banking Science & Training Review, 29-41 Nguyen, K N (2019) Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks J Risk Financial Manag., 12, 138 Nguyen, T., & Stewart, C (2013) Concentration and efficiency in the Vietnamese banking system between 1999 and 2009: A structural model approach Journal of Financial Regulation and Compliance, 21(3), 268-283 Poghosyan, T., & Cihak, M (2011) Determinants of bank distress in Europe: Evidence from a new data set Journal of Financial Services Research, 40, 163-84 Stewart, C., Matousek, R., & Nguyen, T N (2016) Efficiency in the Vietnamese banking system: A DEA double bootstrap approach Research in International Business and Finance, 36, 96-111 Tin, B Q (2013) Risk management in foreign exchange business of joint stock commercial banks in Ho Chi Minh City (PhD), Banking University Ho Chi Minh City, Vietnam Tran, M U N (2015) Impact of Exchange Rate Fluctuations on Business Risk of Joint Stock Commercial Banks: Evidence from Vietnam Research Journal of Finance and Accounting, 6(4) Tran, T T T., Nguyen, Y T., Nguyen, T T H., & Tran, L (2019) The determinants of liquidity risk of commercial banks in Vietnam Banks and Bank Systems, 14(1), 94-110 51 Trinh, P T T (2013) The role of foreign exchange rate in monetary policy of Vietnam (PhD), Banking University, Vietnam Vu, T H (2012) Factors affecting the liquidity of the commercial banks in Vietnam Development and Integration, 23(1), 32-49 Vietnam News (2019) Exchange rate management policy proves effective [Online] Retrieved from https://vietnamnews.vn/economy/536244/exchange-ratemanagement-policy-proves-effective.html [Accessed 28 September 2020] World Bank (2014) Taking stock: An update on Vietnam’s recent economic developments in 2014 Hanoi: Annual Consultative for Vietnam 52 APPENDIX 1: SURVEYS FOR BANKING EMPLOYEES Please complete the following survey Your opinions will contribute to the success of this study The information will only be used for research and data aggregation purposes only Sincerely thank! PART I - PERSONAL INFORMATION (used for statistical classification, the author ensures the confidentiality of your information) Full name: Gender: Working period: Major: Position: PART II - QUESTIONS ON EXCHANGE RATE RISK MANAGEMENT AT THE BANK Please give your opinion on the factors affecting quality of forex trading operations of the bank listed below (check (x) in the most appropriate box) to indicates Very low to Very high level No Level Questions I ENVIRONMENTAL FACTORS Volatility of the economy Changing legal environment II FOREIGN EXCHANGE POLICY OF THE BANK Rates and fees are competitive Foreign exchange products are diverse III BANKING ORGANIZATION 53 The organization and arrangement of the bank’s apparatus is really scientific The operational departments of the bank coordinate with each other to promptly respond to customer service requests IV Employee and retraining is exchange risk implemented effectively The bank’s leadership to management is quite suitable Infrastructure and equipment is modern and advanced EMPLOYEE QUALITY Professional qualifications of banking employees have met the job requirements Banking training employees working in foreign exchange are those who graduated from banking and finance Banking employees working in foreign exchange are often fostered to improve their professional skills Banking employees are experienced and sensitive to foreign exchange market volatility Bank employees have professional ethics and a sense of responsibility 54 APPENDIX 2: SURVEYS FOR CUSTOMERS Please complete the following questionnaire Your opinions will contribute to the success of this study The information will only be used for research and data aggregation purposes only Sincerely thank! PART I - CUSTOMER INFORMATION (used for statistical classification, the author ensures the confidentiality of your information) Name (individual, company): Business field: PART II - QUESTIONS FOR SURVEY Please give your opinion about the deciding factors to use the bank’s foreign exchange services listed below (mark (x) in the most appropriate box) to indicates Very low to Very high level No Level Questions 1 Service prices compared to other banks Qualifications and skills of banking employees Time and procedure to complete a transaction Benefits brought about by products and services Questions for corporate customers only - Do you know about derivative contracts?  Yes  No - Does your company use derivative contracts?  Yes  No - Which derivative tools does your company need to use?  Futures contracts  Swaps  Forward contracts  Warrants 55  Options ... perfect exchange rate risk management at Agribank 1.4.3 New contributions of the thesis The thesis on ? ?Foreign exchange risk management of Vietnam Bank for Agriculture and Rural Development (Agribank)? ??... plans; + Performance of exchange rate - Reports of business risk management; development plan and + Development policy of the foreign exchange policy bank in the coming time and of the bank exchange. .. FRAMEWORK OF EXCHANGE RATE RISK MANAGEMENT IN THE BANKS 2.1 Foreign exchange trading by commercial banks 2.1.1 Concept of foreign exchange trading 2.1.2 Role of foreign exchange
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