Attributes of Foreign Exchange Risk Management with Respect to Pakistani Commercial Banks

The aim of the study is to determine and identify the attributes of foreign exchange risk management with respect to the Pakistan’s commercials bank. The study focuses on shedding light on the Net Foreign currency and subsequently practices the tools that are used by the commercial banks in Pakistan. In addition to that the study defines the foreign currencies that come as an input in the commercial banks. The study includes several different tools and techniques, such as, binary logistic regression, descriptive analysis, simple and multiple linear regression and the independent sample t-tests. Data has been collected from the Karachi Stock Exchange of 110 banks. Findings show that there are several foreign exchange risks faced by the commercial banks of Pakistan, therefore, it has subsequent set of policies and practices to deal with the risks. The study deduces conclusion regarding the exposure of Net Foreign currency, usage of tools and the impact on attributes, such as, the type of the bank, status, size, net assets, and exchange rate volatility.