Ben Trowbridge

Keep Currency Risk from Ruining Your Offshore Outsourcing Agreement

Posted by Ben Trowbridge on Wednesday, 17 November 2010 18:11

The global recession created a volatile market for currencies, understanding how to manage the risks involved can be extremely challenging for companies as well as their providers.

In a typical offshore outsourcing arrangement with a U.S.-based client, the service provider must pay for personnel and non-personnel expenses in one currency (e.g., Indian Rupee - INR), but collect the services fees in another currency (e.g., US dollars - USD) creating a currency risk between the provider’s service expenses and the client’s fees. However, exchange rate fluctuations can be beneficial to the provider, the buyer, or both if an appropriate agreement clause is set in place.

In a recent whitepaper, “Managing Currency Risk in Offshoring Outsourcing” Alsbridge offers several approaches to maximize the economic benefits of a company’s offshore outsourcing agreement...

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