CURRENCY RATE FLUCTUATIONS AND THEIR IMPACT ON SUPPLY CHAIN RISK MANAGEMENT: AN EMPIRICAL ANALYSIS

Currency rate fluctuations pose important risks to companies with large international supply chains in our current globalized economy. International sourcing is particularly affected by the unpredictable variations because they produce costs that vary, shipments that are substantially pushed back and operational disruptions—leading to challenges in industries such as Technology and Automotive. For this reason, successful supply chain risk management approaches are necessary for minimizing these risk factors. This research investigates empirically the impact of currency fluctuations on supply chain operations, particularly the strategies small, medium and large companies use to manage these risks, including currency hedging, contracting in stable currencies and forecasting tools. Using a quantitative methodology, the research collects data by means of a structured questionnaire from 200 supply chain experts representing the Automotive, Technology, Retail and Manufacturing industries. To investigate the connexon between currency fluctuations, the performance of risk management strategies and the contribution of forecasting tools, data analysis was performed using SPSS. Application of statistical techniques including Chi-Square tests, ANOVA, correlation analysis and regression analysis facilitated our understanding of the insights from the data. The results demonstrate that currency hedging and contracting in stable currencies are the optimal strategies for diminishing the harmful results of currency changes, most notably for larger firms. Investigations demonstrate that prediction tools, largely dependent on artificial intelligence (AI) and machine learning, perform remarkably well in predicting currency flows, enabling organizations to address risks in advance. Small or medium enterprises (SMEs) find it hard to use the complex tools effectively owing to resource deficiencies, which leaves them even more susceptible to currency volatility. This research points out that it is very important to include currency risk management within broader supply chain strategies. Businesses that proactively use currency hedging along with sophisticated forecasting systems prove to be more resilient to the risks of currency rate volatility in a world economy that is growing more uncertain.