Cashflow analysis

1. Assume a Kenyan importer buys goods from United States for $20,000 with a payment due in 30 days

2. Assume the spot rate is Ksh. 68 for one US $

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3. Assume the Ksh. is expected to depreciate in value relative to the $ (i.e. Exposed net liability position)

4. Assume that the Kenyan importer enters into a forward contract which stipulate it can buy US dollars after 30 days at Ksh. 70 per dollar


The cash liability for the Kenya Company


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