Fund managers make decisions on the size of their exposure to foreign exchange risks based on the risk approach previously agreed for the fund. This usually means one of the following policies will apply:
It is clear that there are many variations in the approach used by fund managers and forward outrights are an important and useful risk management tool.

Topic 2: Using FX Swaps

Use of FX Swaps to Manage Cash Flows
FX swaps may be used to manage future cash flows in foreign currency.