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How do corporates balance natural hedging with financial hedging?

Natural hedging occurs when revenues and costs are in the same currency, reducing exposure without financial instruments. For example, a European exporter paying suppliers in EUR and earning in EUR avoids risk. When natural hedges are insufficient, companies use financial hedges like forwards and swaps. Benefits: cost-effective and strategic. Risks: incomplete protection during shocks. Institutions advise firms on hybrid models. For traders, this illustrates a principle: the best hedge is often structural, not speculative. In forex, hedging is about balance—using both natural and financial tools to protect value.