Leading and Lagging

[abhishreshthaa]

 Leading and lagging:

Another internal way of managing transactions exposure is to shift the timing of exposures by leading or lagging payables and receivables.


The general rule is lead, i.e. advance payables and lag, i.e. postpone receivables in “strong” currencies and, conversely, lead receivables and lag payables in weak currencies.


Simply shifting the exposure in time is not enough; it has to be combined with a borrowing/lending transaction or a forward transaction to complete the hedge.
Both these tools exist as a response to the existence of market imperfections

 

[rosemarry2]

 Leading and lagging:

Another internal way of managing transactions exposure is to shift the timing of exposures by leading or lagging payables and receivables.


The general rule is lead, i.e. advance payables and lag, i.e. postpone receivables in “strong” currencies and, conversely, lead receivables and lag payables in weak currencies.


Simply shifting the exposure in time is not enough; it has to be combined with a borrowing/lending transaction or a forward transaction to complete the hedge.
Both these tools exist as a response to the existence of market imperfections

Hi abhi,

Here I am sharing Process Safety Leading and Lagging Metrics, so please download and check it.