Leads and Lags
Companies speeding up or delaying foreign currency payments and receipts to benefit from expected…
In plain English
Companies speeding up or delaying foreign currency payments and receipts to benefit from expected exchange-rate moves.
If a firm expects a currency to weaken, it may rush to convert money it receives in that currency (leading) and delay paying bills owed in it (lagging). Do the reverse if you expect it to strengthen.
When many firms do this at once, leads and lags can add pressure to a currency that is already under strain, a kind of self-reinforcing loop.
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