| dc.description.abstract | Companies especially those participating in international trade are now exposed to
risks caused by unexpected movements in exchange rate in today’s volatile financial
markets. The management of this risk has become essential for the survival of such
companies. Oil companies in Kenyan market are significantly exposed to foreign
exchange risk through transactions involving importation of oil products and
subsequent exportation to the neighboring countries.
This paper reviews the traditional types of exchange rate risk faced by firms, namely
translation, transaction and economic risk, presents measurement and management
method for foreign exchange exposure and objectives of foreign exchange management.
The objective of this study is to determine the foreign exchange risk management
practices by oil companies operating in Kenyan market. To achieve this objective, data
was collected from the target population comprising 27 major oil companies operating
in Kenyan market as listed in appendix 1 through administration of questionnaire using
‘drop-and-pick-later’ technique. Out of 27 companies, only 20 responded representing a
response rate of 74%. | en |
