Approaches to Investing Trapped Cash

23-05-2023 | All international companies put a lot of effort into avoiding having cash trapped in emerging countries.

FX & Currency Hedging Policy Review

10-05-2023 | FX and currency hedging are complex topics, which generate a lot of discussion in most companies. We held this session to see whether members are changing their hedging strategies in response to the recent increase in currency volatility, coming after a period of (relative) stability.

Transacting with Sanctioned Countries

17-04-2023 | At CompleXCountries, it is our mission to provide a forum where treasurers can openly discuss issues and share experiences. We then publish the essence of the discussion, but in a format that respects the need for confidentiality – though it is valuable general information, there is no upside to telling the whole world your specific company has had a problem with Bank A, or that you find country B’s exchange control regulations difficult to handle.

Treasury Policies & Processes for Crypto Transactions

02-02-2023 | treasuryXL | ComplexCountries | LinkedIn |

This call took place five days after FTX filed for bankruptcy. However our discussion did not dwell on crypto as an investment (We haven’t found a treasurer who would). The interest for treasurers is to help their companies understand the business opportunities of the metaverse, and that isn’t going away.


According to Gartner,’ [] by 2026, 25% of people will spend at least one hour per day in a metaverse for work, shopping, education, social media and/or entertainment’, and…’A metaverse is not device-independent, nor owned by a single vendor. It is an independent virtual economy, enabled by digital currencies and non-fungible tokens (NFTs).

So it’s no surprise that many companies are developing strategies to capitalise on what could be a massive business opportunity. Participants in this call comprised treasurers representing companies at different stages of this journey, all facing the challenge that the regulatory and financial infrastructure available is at an early stage of evolution.

  • About half of the participants are still investigating the use of crypto and exploring how it works in case it does evolve within their businesses, but still not necessarily wanting to accept crypto or handle crypto within treasury operations.
  • Risk management to enable safe use in Corporate Treasury remains paramount and it isn’t easy.
  • We are seeing continued evolution around the NFT space and using crypto for settlement. But it continues to be quite limited.
  • Accounting requirements for how crypto currencies are handled are still not clear and not necessarily sustainable for the future. Regulations are going to evolve.
  • It is fascinating to hear, for the first time, crypto working capital is being used to match crypto receivables to payables in certain types of crypto currencies, e.g. Ether.
  • In the last 12 months companies have started to buy land in the metaverse in order to understand how it works as a marketing tool.
  • Selecting crypto currency platforms is challenging and KYC with some is a (reassuringly) painful experience. The providers discussed in this report include: Etherium, Coinbase, Mt Pelerin, Bit Panda and Anchorage.
  • For the most part, banks are watching the space and have yet to come up with solutions for corporates and CBDCs are at an early stage, but one thing we can be sure of is that there is a lot more to come on this topic.

Crypto has clearly not gone away for corporate treasurers and I’m certain we’ll see further uses going forward. There is a huge amount of detail in this report, which is essential reading for any treasurer wishing to understand the challenges or benchmark their processes.


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What is possible in Complex Countries for Treasury?

26-01-2023 | treasuryXL | ComplexCountries | LinkedIn |

ComplexCountries reports detail how corporate treasurers approach challenges in complex countries, across associated treasury processes and how they adapt to economic and regulatory changes.

Their reports cover a wide range of topics associated with treasury processes in these countries, and how they are impacted by economic and regulatory changes. This includes how corporate treasurers approach currency risk management, compliance with local regulations, and maintaining cash and liquidity in the face of political and economic instability. The goal is to help treasurers navigate these challenges and protect their company’s financial position.

Find below some of the free reports detailing complex country challenges for treasurers


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The Impact of Russian Aggression on Regional Treasury & FX

13-12-2022 | treasuryXL | ComplexCountries | LinkedIn |

This call was held at a point in the conflict where Ukraine had made serious inroads into Russian held territory, and there was a lot of talk about the potential use by Russia of nuclear weapons. So, one of the questions was whether treasurers are expecting a nuclear escalation, a spread of the conflict, and what to do to prepare for it.


None of these concerns were mentioned. For most companies, the business in the countries surrounding Russia and Ukraine is minimal. The bigger concern is, and remains, the impact on the business outlook in the rest of the world, the impact of increasing interest rates, inflation, and logistics issues – though logistics seem to be improving.

Instead, most participants continue to do business in Russia – mostly because they are in industries that benefit from the health and humanitarian exceptions to sanctions. In other cases, the business is essentially local, but uses the corporate brand – this means care must be taken when withdrawing. Having an exception from sanctions still leaves issues:

  • Even if your currency transactions are legal, a lot of banks refuse to handle them, because they do not want to take the risk of dealing with the country.
  • Many banks withdraw, reducing the choice of service providers. There was a lot of discussion about Citi – most participants use them, but there has been some confusion as to whether they are staying. The message to all participants is that they are.
  • Even when cross-border transactions are processed, there can be a lot of delay: the banks’ compliance departments examine everything very closely – but they are overworked.
  • The definitions of sanctions exempted products are inconsistent between various sanctioning groups (notably, the US and the EU), and they leave logical inconsistencies
  • The sanctions and regulations on both sides are something of a moving target, so compliance can be challenging.
  • There was an informal trouble zone in the countries surrounding Russia: Georgia, Kazakhstan, etc. This business is now moving to USD and EUR, which has reduced liquidity.

Despite this, our participants found it is generally possible to make payments into and out of Russia, even if the process can take a long time. Banks are moving to close offshore rouble accounts, especially in London, but they are being flexible over deadlines. Dividends are definitely not allowed, but most other types of payment seem to be possible. While some participants continue to move towards the exit – protecting local employees remains a priority – other are finding that their business in Russia is doing surprisingly well.

In terms of banking, everyone seemed to be using Citi [this discussion took place before Citi announced their withdrawal from Russia – from March 2023], though most were opening accounts with Raiffeisen as a backup. This is a return to the Communist era, when Raiffeisen was the main conduit for payments to and from Russia.

Bottom line: for our treasurers, the main concern is slowing economic growth in the west, increasing energy prices, higher interest rate and inflation. This is impacting their main business, which is typically not in Eastern Europe. As for Russia itself, people continue to move towards the exit – but those who have to stay, for mostly humanitarian reasons, are finding that business is complicated – but it continues.


This report was produced by Monie Lindsey based on a Treasury Peer Call chaired by Damian Glendinning

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Access to the full report is available to Premium Subscribers of ComplexCountries. Please log in on the website of ComplexCountries to access the download.
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The Impact of Rising Interest Rates on Working Capital

07-11-2022 | treasuryXL | ComplexCountries | LinkedIn |

No apologies for the second report on working capital and interest rate rises in a short period: we are seeing significant changes in the business environment, and treasurers are being challenged.


This call focused primarily on the higher interest rate environment. One participant was mostly concerned about how to invest excess cash – the others are grappling with rapidly increasing working capital, driven by the need to keep bigger buffers, due to COVID and the Russia/Ukraine war, and the long delays in logistics circuits.

Funding challenges:

  • One participant manages treasury for South America, where there have been significant rises in interest rates, and, in some countries, funding shortages, with banks unable to provide cash and prioritising local companies. The challenges have been manageable, and they have not had to resort to drawing down all their lines to make sure they are available. This behaviour, which is akin to the rush on toilet paper in supermarkets, has been an issue in many markets, including more developed ones. However, there has been some, limited, pre-funding around significant events.
  • This has led to an increase in the number of banks in the funding panel.
  • One participant prefers their subsidiaries to fund themselves locally – but the cost of higher interest rates (for example, 35% in Turkey) is dissuasive, even if, economically, they are significantly below the inflation rate (>80%).
  • There is an increased focus on being more efficient in the use of cash within the company, so more pressure on cross-border pooling, accessing trapped cash, intercompany netting, etc.
  • Some participants are using the situation to selectively get higher discounts for pre-paying suppliers: this can be an effective way to increase the return on cash
  • Generally, the participants are at the point where these challenges cause additional work, but none of them is particularly serious.

Working Capital Management

  • Typically, treasurers have to fund working capital, but they do not manage it.
  • In all cases, there is a dialogue with the business about how much working capital the business can support, and how it can be reduced.
  • Higher interest rates are resulting in increased expense. Depending on the company, this may, or may not, be reflected in the measurements of the business units.
  • The participants all agreed with the business need to hold more inventory, but a dialogue is required to make sure this doesn’t get out of control. One participant works with the business on resisting calls to change payment terms, while another helps arrange pre-funding for suppliers, when needed.


This report was produced by Monie Lindsey based on a Treasury Peer Call chaired by Damian Glendinning

To access this report:

Access to the full report is available to Premium Subscribers of ComplexCountries. Please log in on the website of ComplexCountries to access the download.
Please contact ComplexCountries to find out about their subscription packages.

The Impact of the Supply Chain Crisis on Working Capital

10-10-2022 | treasuryXL | ComplexCountries | LinkedIn |

Working capital is always a hot topic – but never more so than now. Depending on how you count, most businesses are facing double, triple or more whammies.


The Impact of the Supply Chain Crisis on Working Capital

  • Difficulty obtaining supplies, resulting in lost sales, or seasonal goods arriving too late for the season (one participant is in the apparel industry, where this is crucial).
  • Manufacturing inventories building up, as products cannot be completed or sold due to one or two missing components – but the rest have been bought and paid for.
  • Supply chain management building extra inventory buffers
  • Difficulty managing FX hedging programmes, as future cash flows become even harder to predict and forecast
  • And, of course, this is all happening against an environment of rising interest rates, which increases the cost of holding inventory
  • Margin pressures, due to increased shipping costs – especially given the increased use of emergency shipments, which come outside the agreed rates
  • Coupled with inflation and recession risks, there is an increasing concern over distributors’ being left with unsold inventory, with an accompanying credit risk

As always, we had a lively discussion – I encourage you to read the different stories our participants had to tell. They contain lessons for all of us. The main takeaways:

  • There is increased use of supply chain financing programmes, both supplier financing and factoring. Suppliers are becoming less reluctant to use them, and several participants have extended these programmes to countries and areas where they were not used before.
  • An increasing trend to use fintech platforms for this, rather than single bank programmes – often for capacity reasons, as well as ease of use.
  • In many cases, treasury is working with procurement and the suppliers to find a collaborative solution. This can involve paying suppliers early, to help them.
  • One participant spoke of a failed implementation of supply chain financing – the lesson being that you need to have the right team.
  • In each case, treasury is working with the business to try to find the right trade off between the cost of holding more inventory, and the cost of missed or late sales.
  • One participant uses internal factoring to make the best use of cash within the company, before they go to the outside market for funding. This is a cash optimisation tool we often forget.
  • One participant’s company manages very large, multi-year fixed price contracts, with many suppliers around the world. This is a particularly challenging environment.
  • Again, while treasury tends to view inventory and working capital as an evil, it can also be a competitive advantage, if you can supply when your competitors cannot.

Managing and funding working capital is one of the biggest challenges we face. In an environment such as today’s, it is an area where treasurers can truly add value to the business.



This report was produced by Monie Lindsey based on a Treasury Peer Call chaired by Damian Glendinning

To access this report:

Access to the full report is available to Premium Subscribers of ComplexCountries. Please log in on the website of ComplexCountries to access the download.
Please contact ComplexCountries to find out about their subscription packages.

Payment Platforms & Collections in China

11-08-2022 | treasuryXL | ComplexCountries | LinkedIn |

Cryptocurrency, digital wallets, virtual everything – there is a huge amount of change. China has been at the forefront of a lot of digital trends, partly due to the fact it had an antiquated banking system which has been thoroughly modernised, and partly because the explosion of internet shopping in the country required a digital payments solution. This is a challenge when there are no credit cards.


This report is based on a Treasury peer Call which explored how this is affecting members’ companies, and how they are adapting to this brave new, digital, world.
  • Most participants are accepting payment using WeChat Pay and Alipay. None is using these tools to make corporate payments.
  • The collections process using these tools is efficient and effective: you work with a third party (usually accessed via a banking provider), who will transfer the funds to your account the following day. One participant did an RFP, with two Chinese and two foreign banks, and found the service was identical – though pricing was different, and not transparent.
  • There was no mention of billbacks, the excessively high fees and acquirors which blight the use of credit cards in other countries
  • The one complaint all participants had was the difficulty linking this process to internal systems, for the reconciliation of receipts or for compliance purposes in terms of identifying the source of cash. The third party companies do provide detailed lists of payors, but it can be difficult to upload these into the ERP system.
  • There was a lot of discussion about travel expenses. The low acceptance of credit cards in China complicates the automated links which often exist between credit cards and T&E management and control systems. Allowing employees to use Alipay and WeChat Pay generally raised problems in terms of obtaining adequate receipts. One participant’s company was doing extensive auditing of travel expense claims, but this is expensive.
  • One company is using virtual credit cards to solve some of these issues, while one is routing payments made on AliPay and WeChat Pay via credit card providers to get the automated expense reporting.
  • Another issue was that, in some cases, sales teams had opened Alipay and WeChat Pay wallets for customers to pay into – but there was no way to stop them from taking this cash to pay themselves. The solution is to require all collections to go via the third party providers, who are under instructions to only remit the cash to the Company’s bank account.
  • Most B2B collections still go through bank transfers or BADs (Bankers’ Acceptance Drafts). One participant is introducing controls to ensure BADs are only accepted if drawn on banks with an acceptable credit profile. Some participants are making payments by endorsing customers’ BADs to their own suppliers. There are some collections by cheque.
  • On the payments side, most participants are making payments via the banks’ host to host systems, or using the payment tools in their TMS products. Participants are using a variety of local and foreign banks: ICBC and Bank of China got the most mentions amongst the Chinese banks, with a spread across Citi, HSBC, Standard Chartered and Deutsche Bank for the foreign ones. Kyriba was the TMS mentioned.
  • One participant is using Pcards for small value purchases – but this is not easy.
  • One participant was struggling with customers who have operations in both mainland China and Hong Kong, and who regularly make payments out of the wrong entity.
  • One participant has experience of linking their IT systems directly to the banking system, to get reporting from all their banks. While possible, this requires a lot of IT work.

There as also a discussion about cash pooling: this works in China.

Bottom line: China is at the forefront of innovation in dematerialised payments. As one participant put it, it has become very hard to use old fashioned cash.

But, as this is China, things are not straightforward!

This report was produced by Monie Lindsey based on a Treasury Peer Call chaired by Damian Glendinning

To access this report:

Access to the full report is available to Premium Subscribers of ComplexCountries. Please log in on the website of ComplexCountries to access the download.
Please contact ComplexCountries to find out about their subscription packages.

Approaches to FX Volatility

13-07-2022 | treasuryXL | ComplexCountries | LinkedIn |

The latest CompleXCountries report is based on two Treasury Peer Calls in which senior treasurers from Asia, the Americas and Europe discussed the latest bout of increased FX volatility, and the impact it is having on their hedging strategies. As to current volatility, some people are adjusting their strategies, but most prefer to stick with the approach which has already been defined.


FX – one of the biggest and most important challenges we all face. It has a direct impact on the business, and everyone has a view.

The calls (European morning and afternoon to accommodate Asia and the Americas) were to discuss the latest bout of increased FX volatility, and the impact it is having on people’s hedging strategies – if any. Unsurprisingly, it turned into a long discussion of the way different companies approach hedging. The report below is long and very varied – we managed to reduce it to 20 pages, but they are dense. As to current volatility, some people are adjusting their strategies, but most prefer to stick with the approach which has already been defined.

What is that approach? The participants came from a variety of different industries, and covered a broad range of different ways of handling the issue.

  • Everyone has a defined hedging approach, though most contain some degree of flexibility. So, if the approach is to hedge the next 6 months, for example, there may be leeway to go down to 4 months or up to 8.
  • Most people add their hedges via a layering approach, where they build up the hedge over time. This provides an average hedge rate, and avoids the risk of choosing a single point in time.
  • Everyone tries to match their hedges to the needs of the business. This involves co-ordinating with the business units to get their input on the ability to change prices, how long it takes to do so, etc.
  • Most companies have a centralised approach to hedging, but there is variety as to whether central treasury acts as and advisor, or as a decision maker. In most cases, this is decided by the company’s internal measurements and incentive system.
  • Several companies try to insulate the operating units from the effects of currency. This is done by various means: several participants operate re-invoicing centres, which invoice the operating entities in their own currencies, and manage the resulting exposures in the centre. One participant achieves the same result by levying a currency specific working capital charge on the operating units. The income from this charge is then used to pay for hedges – which may, or may not, actually be taken out.
  • In these cases, the centre usually operates as a profit centre – but with strong risk management disciplines to contain the danger of positions getting out of control.
  • One other approach is to fix a budget exchange rate for the coming year, and try to lock that in via hedges. There was a discussion as to whether this suits all businesses.
  • Most participants use forwards for hedging, with the choice of deliverable or NDF varying from one country to another. Several use options, though cost and accounting complexity were obstacles.
  • One participant has an approach which is built entirely around options, including a sophisticated trading strategy to reduce the cost of what they view simply as an insurance policy, like any other. This company is also very opportunistic, and will be active or inactive in the market according to their view of current pricing. This company is also private, and family owned, so they have a higher tolerance for earnings volatility than most – and they are not concerned about quarterly earnings announcements. They also have a relatively high margin business.
  • In this company, as in all others, this strategy is only possible because it has the understanding and buy-in of the management and the operating units. Every participant mentioned this as being key for success.
  • Generally, the percentage of hedging is fixed by policy. However, most participants exercise some judgement, based on the cost of hedging. This is particularly relevant for some emerging market countries, such as Brazil, Argentina and many African countries. The judgement as to what constitutes a hedge which is too expensive was often empirical, but the currencies which were left unhedged usually did not represent a significant exposure for the company.
  • Most participants prioritise balance sheet hedging over cash flow hedging, but some take the opposite approach. In all cases, the accounting treatment is a significant factor in determining the approach.

Bottom line: hedging and managing currency is one of the key competences of the treasurer. For many years to come, it will continue to be one of the areas where there is the biggest variation in approaches – and endless debates. If you have an approach which is well defined and which has been fully discussed with the business, there should not be any need to change it during a period of volatility – though it can be an excellent stress test!


This report was produced by Monie Lindsey, based on two treasury peer calls chaired by Damian Glendinning.

[The full report can be downloaded FREE by corporate treasury practitioners, please Log in to your account to download (if you receive emails from us – use your email address to retrieve your password), if setting up a new account, please ask for the FX report in the comments and ComplexCountries will send you a copy]

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