In today's dynamic economic environment, CFOs, treasurers and treasury management professionals across Asia are navigating an increasingly complex web of financial risks. From managing currency volatility to addressing rising interest rates and tightening credit conditions, these financial leaders are employing innovative strategies to safeguard their organizations.

Geopolitical tensions and regulatory shifts further compound these challenges, prompting a more proactive and data-driven approach to risk assessment and management. By leveraging advanced technologies, strengthening liquidity buffers, and implementing robust hedging strategies, they are not only mitigating risks but also positioning their companies for greater resilience and growth in a rapidly evolving landscape.

As part of our Treasury Review 2024 ( TR 2024 ), Asset Benchmark Research ( ABR ) reached out to over 500 treasury management professionals to better understand the risks that impact their business the most and the steps they are taking to overcome these challenges.

The respondents said the top three financial risks confronting their work were commodity risks, foreign exchange risks, and counterparty risks, in that order. This indicates that in 2024, treasury management professionals were concerned about possible global supply chain disruptions or geopolitical tensions impacting the pricing of critical commodities such as crude oil or lithium.

This shows a slight difference from the 2023 review, where foreign exchange risk was identified as the top financial risk by close to seven out of ten companies engaged by ABR. While still a significant concern in 2024, foreign exchange risks dropped to the second spot, which may suggest relative stabilization in the currency markets or effective hedging strategies already in place. 

Regarding FX hedging strategies, most respondents, as in previous years, looked at forward contracts/swaps while others chose currency options and risk shifting. Given the interest rate differential between the US dollar and several local currencies in Asia, a number of treasury management professionals opted to source cheaper onshore local currency financing to support their operations.

When responding to high interest rates, the majority of TR 2024 respondents sought to improve the cash conversion cycle. This strategy was followed by renegotiating loan terms/refinancing existing debt and implementing interest rate hedging strategies such as using derivative instruments like interest rate swaps or options.

These insights represent just some of the interesting data ABR has extracted from TR 2024, an annual review we have been conducting for a decade now to feel the pulse of CFOs, treasurers and treasury management professionals.  

To view the previous articles in our series based on TR 2024 data, please see below.

Curious to know how respondents address their cash management needs? Please go here.

To see how CFOs and treasurers choose their trade finance banks, please go here.

For insights into how treasury management professionals view technology, please go here.

Are you a CFO, treasurer or treasury management professional? If so, please take part in our TR 2025 to share your valued views on the trends shaping your profession and rate the service providers with whom you work.