How do we handle exchange-rate uncertainty in a project budget?
Currency exposureIdentify which commitments and receipts are in different currencies, then work with finance on authorized assumptions and responses. Do not invent a hedging strategy within the project team.
What to do now
- List currency-specific obligations
- Separate fixed and variable exchange exposure
- Model plausible budget effects
- Agree monitoring and action thresholds with finance
When to escalate
Escalate when
Exposure exceeds budget tolerance or requires a treasury decision.
Who decides
The budget owner and authorized finance representative
Example
An overseas supplier commitment is tracked in its original currency alongside the approved budget-rate assumption.
Mistake to avoid
Using one historical exchange rate as a guaranteed future cost.
Prevent a repeat
Review remaining cost and commitments, not only money already spent; reconcile with the authorized finance source.
Related cases
- How do we control project contingency without hiding it?Opaque contingency management
- A change request has no budget impact listed. Is zero credible?Incomplete change impact
- How should we handle a risk we cannot prevent?Unavoidable exposure
- We are closing with residual risks. What must be transferred?Unowned residual risk exposure