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Hedging involving different currencies

»Ê¹ÚÌåÓýapp underlying assets of Comtrek HK Ltd are denominated in US dollars. Comtrek plc decides that it can reduce the exchange risk from its HK$1 million shareholding in the subsidiary by borrowing in US dollars. It is also possible that Comtrek HK Ltd will hedge its Hong Kong assets with a US dollar loan. Whilst the HK dollar remains pegged to the US dollar this provides an effective hedge and would be acceptable for accounting and tax purposes.