Can anyone tell me what is unhedged foreign currency exposure and how to calculate its amount??
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Quick Summary
This discussion explains unhedged foreign currency exposure (UFCE) as the gross sum of balance sheet items affected by foreign exchange rate movements. It clarifies that UFCE includes receivables and payables impacting profit and loss, and advises consulting the Reserve Bank's directions for specific calculation methods, especially for import-export scenarios.
Refer to the gross sum of all items in the balance sheet that have impact on profit and losss account due to the movement in foreign exchange rates . you have to make certain provisions for loss due to foreign currency fluctuations .