Oil Hedging

Executive Summary In late November 2008, two primaeval rights petitions was filed in the Sri Lankan unequivocal Court against the oil colour hedgerow agreements with the Ceylon rock oil potentiometer (CPC) and several leading transnational and state banks. The subsequent prove in to the case revealed colossal losses to the State that could trudge from a low of $700 zillion to as high as $1,000 million if the decline of bad-mannered oil tolls continues as communicate by Merril Lynch faculty Research, a US ground energy expert (The monetary Times, December 2008, The Sunday Times). The hedging deal was subject to often debate and discussion in the Sri Lankan parliament as strong as local and outside(a) media and resulted in the temporary breakage of payments to the banks involved, the suspension of the CPC Chairman, and accusations against the Minister of Petroleum for alleged fraud. The investigations to the case were halted by the Supreme Court as the governme nt refused to bring down the price of petrol as enunciateed by the Court. This report willing explore the oil hedging deal and its consequences from the Sri Lankan perspective.

It will go off the trading strategies employ by the CPC by providing an overview of the distant change market, an introduction in to hedging and various alternatives available for insuring against foreign exchange risk, a discussion on what type of option would fall in outgo suited the Sri Lankan circumstances as puff up as probe in to what went wrong, the resulting disadvantages, how proper supervision could have averted disaster as well as recommendations on how similar f! inancial crises may be avoided in the future. The facts discussed and views expressed in the report be purely for academic purposes and do not represent whatsoever prejudicial or political views. 1.Understanding the overseas commuting Market In order to understand the hedging deals entered in to by the CPC, and the consequences thereto, it is important to first gain a broad overview of the...If you expect to get a full essay, order it on our website: BestEssayCheap.com

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