MCCU Annual Report - page 86

86
31. Financial Instruments and Financial Instruments Risk Management (cont'd):
c) Market Risk
i) Foreign currency risk
2013
2012
Liquid Assets - earning
United States dollar
129,537
$
563,730
$
Canadian dollar
66,701
$
32,764
$
Pound Sterling
13,563
£
31,145
£
Financial Investments
United States dollar
1,044,610
$
676,050
$
Sensitivity analysis
US $
CAD $
UK £
14th March 2014
108.74
97.84
181.16
31st December 2013
105.93
98.82
174.38
31st December 2012
92.15
91.41
148.29
Exchange rates in terms of Jamaican Dollars which is the Credit Union's principal intervening currency, were as
follows:
Foreign currency risk is the risk that the market value of, or the cash flows from financial instruments will vary
because of exchange rate fluctuations. The Credit Union is exposed to foreign currency risk due to fluctuations
in exchange rates on transactions and balances that are denominated in currencies other than the Jamaican dollar.
The credit union manages its foreign exchange risk by ensuring that the net exposure in foreign assets and
liabilities is kept to an acceptable level by monitoring foreign currency positions and by buying or selling
currencies at spot rates when necessary to address short-term imbalances.
There has been no change to the Credit
Union’s
exposure to market risks or the manner in which it manages and
measures these risks.
The foreign currency exchange rates have steadily stabilised over the preceding eight months. The co-operative's
exposure to market risks has therefore fluctuated as a consequence.
YEAR ENDED 31ST DECEMBER 2013
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of
changes in market prices. These arise mainly from changes in interest rates, foreign currency rates and equity prices
and will affect the Credit
Union’s
income or the value of its holdings of financial instruments. The objective of
market risk management is to monitor and control market risk exposures within acceptable parameters, while
optimising the return on risk. Market risk exposures are measured using sensitivity analyses.
MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LIMITED
NOTES TO THE FINANCIAL STATEMENTS - (CONT'D)
The Credit
Union’s
foreign currency exposure consists mainly of deposit accounts which at the date of the
statement of financial position were as follows:
MANCHESTER CO-OPERATIVE CREDIT UNION
ANNUAL REPORT 2013
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