Impact of Foreign Currency Fluctuation on Financial Performance of Multinational Companies Working in Pakistan

Abstract

This thesis investigates the effect of foreign currency fluctuations on the financial performance of multinational companies (MNCs) operating in Pakistan. MNCs are businesses that have substantial cross-border investments and transactions and that operate in many nations. The term "foreign currency fluctuation" describes how the exchange rates of various currencies fluctuate over time and how this might impact MNCs' revenues, expenses, profits, and risks. The thesis uses multinational companies (MNCs) financial data across cement industry. The thesis measures the impact of foreign exchange fluctuations on the financial performance of cement companies The findings demonstrate that foreign exchange fluctuations have a major and detrimental effect on MNC financial performance in Pakistan, particularly on profitability and solvency measures. The findings also show that various industries and time periods are affected differently by foreign exchange fluctuations. The thesis presents some policy implications and suggestions for regulators, law-makers, and multinational companies (MNCs) to lessen the negative impact of currency fluctuations on their financial performance.