1. Establish the base currency.
Countries with “hard” currency (currency that can be traded outside the country’s borders) typically negotiate only in their currency. Your organization assumes the risk associated with exchange rates fluctuating over time. Countries with “soft” currency (which has no value outside that country’s borders) negotiate in a hard currency (such as U.S. dollars or the euro).
Warning: Confirm how payments can be made when dealing with soft currency; you may be unable to use wire transfers.
2. Use fixed-rate exchange
One way to have budget certainty is to agree on a fixed rate of exchange with each vendor and for each . Negotiating such contracts will be easier in the short term in these days of rapid currency fluctuations.
3. Buy a forward contract.
Buying a forward contract means buying foreign currency on the futures market at the rate prevailing when contracts are negotiated. A forward contract doesn’t cost anything, but you are promising to purchase a certain amount of currency at a fixed rate within a time frame (usually 12 months). Buy a little less than you will use to avoid having a surplus that you may not be able to spend without paying additional exchange fees or penalties.
4. Consider a bank account.
You may be able to open a bank account in your event city/country. This can be beneficial if you plan to hold an international event on an annual basis. As you receive revenue from exhibit sales and registration, you can make scheduled payments and forward the funds to an international bank that will convert the U.S. dollars into the appropriate currency. In addition, you can write checks in the appropriate foreign currency from this bank to pay for on-site expenses. This eliminates the effect of exchange fees, which can add up.
Warning: Failure to observe a country’s bank limits and procedures can result in money being confiscated or impounded. Consult a travel agency or professional congress organizer for guidance.
Leigh Wintz has served as executive director for Soroptimist International of the Americas since 1991. Her expertise includes international structure and governance issues, program development, development and international meetings. She has traveled the globe sharing ideas on how women can help other women; discussing issues such as domestic violence and pay inequity; and speaking about Soroptimist's Women's Opportunity Awards.
She is also principal consultant for Tecker International LLC, a role she will make full time when she leaves Soroptimist in September 2011. Tecker International is an international consulting practice focused on meeting the special needs of organizations and institutions managing through change.