The Forex Fallacy:
Why You’re Losing Money Before the Market Even Moves

Cost Centre or Profit Centre? The Strategic Identity Crisis

Too many finance leaders still manage forex as a back-office cost centre—just another overhead to minimise. But in a world where currency fluctuations can swing EBITDA by several points, treating forex as a strategic lever is no longer optional.

The key question here is: Is your hedging strategy based on market dynamics or on internal benchmarks rooted in business fundamentals? Companies relying solely on external market sentiment often hedge reactively, missing the bigger picture. Instead, aligning hedging with pre-defined business benchmarks—like target margin thresholds or procurement cycles—ensures protection with purpose. If you don’t define success internally, you’re always reacting to the market instead of controlling your exposure.

Cash Flow vs. Financing Instruments: Are They in Sync?

It’s astonishing how often a company’s financing instruments are out of sync with its cash flow realities. A mismatch here creates massive strain.

Let’s say you’re an exporter who will receive $100,000 in 90 days from your overseas customer. But you also have an import payment due in 60 days, and to pay for it, you take a buyer’s credit loan.

Now you have to repay the bank 30 days before you get your export money. That means you either need to arrange extra funds for a month, or you might be forced to convert forex early at a bad rate.

The solution? Align your hedge and financing periods with your real cash flow. If your money comes in after 90 days, take a 90-day loan, not 60. That way, you don’t lose money trying to fill the gap.

The Hidden Cost of Conversions: Are Banks Quietly Over-Charging You?

Banks don't always charge fees in ways that appear on your statements. That 2–3 paise spread they slip into your FX conversion rate? That’s margin leakage. Multiply that by millions in exposure, and you’re losing far more than you think.

A lack of transparency in pricing—especially in forward contracts and cross-currency conversions—means companies unknowingly overpay. Worse, many don’t benchmark FX performance at all.

A simple fix? Use platforms like Myforexeye’s App to see live interbank rates. This way, you know exactly what the fair rate is before making a deal, and avoid paying more than you should.

Time to Flip the Script

While it may seem tempting to blame market volatility or external factors for forex losses, the truth is that poor execution and internal inefficiencies often play a much larger role. By treating forex as a controllable lever and shifting towards a strategy-first mindset, businesses can not only mitigate risks but also capitalise on opportunities in ways that previously seemed impossible.

Conclusion: Start Mastering Forex

To truly succeed in the forex market, businesses need to prioritize process improvement, real-time execution, and strategic alignment across all departments. Only then can forex risk management be transformed from a business burden into a growth enabler.

Your forex desk can’t be an afterthought. With the right strategy, FX can be a profit driver—not a leak in your P&L. The mindset shift is simple: stop reacting to the market. Start mastering it.