The case scenario emphasizes the impact of currency rate fluctuations on the profitability of an export focused textile production organization, TT Textiles. Regardless of the economic crises of the 2007-08, when the Indian rupee was anticipated to ascend to an unprecedented level of 35 INR per U.S. dollars, the organization had developed into a swap deal with foundations on the historic stability of the Swiss franc (CHF) against the US$.
At the time of making it, the bargain had looked extremely successful and comparatively safe. However once the global financial crisis hit in 2008, it started making sizable mark-to-market losses. The sudden behaviour of the supposedly steady exchange rate between the US$ and the CHF was perplexing. There was uncertainty about the future. With three months left on the contract, in March 2009, the managing director, Sanjay Jain, was confronted with the problem of whether to quit there and then or hold the deal till maturity.
PUBLICATION DATE: February 15, 2013 PRODUCT #: ISB009-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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