How can grant recipients manage the risks inherent in currency fluctuations?
Grant recipients assume the risk that the value of the Euro might decline, thereby decreasing the value of their grant. However, by using the official monthly exchange rate at the time each expense is incurred it is hoped that any fluctuations are “smoothed” over time, exposing a smaller proportion of expenditures to sudden decreases in the value of the euro. Of course based on recent history (which is no guarantee of future performance) it is also possible that the value of the Euro will appreciate.
