After examining various nations' economic outlook, currency volatility projections, and availability of accurate FX rates, we have identified five currencies that may prove particularly tricky for corporate finance departments to manage in the first quarter of 2016:

Turkish Lira

Turkey's currency (and economy) has suffered from the dampening enthusiasm for emerging markets as well as from anticipation of the oft-delayed U.S. interest rate increase. While awaiting the Fed decision, the Turkish Central Bank held its own interest rates steady for most of 2015, sending the lira to its weakest-ever level against the U.S. dollar. Political instability also raised questions about the government's ability to drive economic growth.

Despite a tough 2015, the lira's prospects should improve during this quarter. Elections in November delivered a decisive outcome for the ruling party, surprising most observers. The promise of a stable administration has shored up confidence in Turkey's political system, leading to a nearly instantaneous lift in the value of the lira. Finally, the falling price of oil has been a boon for the country's businesses, as Turkey has to import most of its fuel; lower oil prices equate to a lower cost of doing business in Turkey.

For corporate treasurers, the key challenge in dealing with the Turkish lira may lie in geopolitical instability—namely, tensions with Russia—which may drive volatility higher and make it difficult to source accurate lira/dollar and lira/euro rates. Likewise, the lira's plummet versus the dollar has been a challenge for corporations with business operations in the region.

In looking for a rate source, corporate treasurers should examine two key aspects of their source: First, they should evaluate the degree to which the provider is specialized. Some providers are data aggregators that handle many asset classes, not just FX. Given the challenge and investment required to provide accurate FX rates, it's important to ensure that rates are coming from someone knowledgeable about FX markets, not someone who is just "passing through" a number.

Making sure a prospective provider's data is reliable is crucial, but a second consideration is whether the FX-rate provider can automate the feed of those rates into the company's financial systems. Particularly for volatile currencies such as the lira, companies need to ensure that their systems automatically update as rates change. Otherwise, the treasurer will be left cutting and pasting numbers, which is a slow and error-prone process.

This advice applies to all currencies that are difficult to source reliably.

Russian Ruble

On top of the deflated interest in emerging markets overall, the Russian ruble also suffered from falling commodity prices in 2015. Because Russia's economy is dependent on oil exports, lower prices had the opposite effect on Russia that they had on Turkey, and Russian businesses suffered. Looking ahead, many observers feel that the Fed's interest rate decision may have a negative effect on the ruble if the rate hikes (or discussion thereof) intensify. Weak oil prices could also weaken the ruble against the U.S. dollar.

However, prospects for the country's business sector seem to leveling out: The impact of the currency's weakness on consumer prices appears to be subsiding. The Central Bank of Russia has stopped cutting interest rates for now, but if inflation expectations slow, rates may be cut further, which may boost economic growth. The Russian banking sector has largely been cut off from accessing capital from other countries, but it has sufficient liquidity—namely, liquidity in U.S. dollars and euros—to function well, further instilling confidence.

The volatility of the ruble was tricky for multinational corporations to deal with in 2015, but the outlook for the first half of 2016 is pointing to a more predictable rate. The catch is that corporations must understand when and where they should source ruble FX rates, and how rates are affected by non-economic events. For example, it's widely known that the ruble tends to strengthen toward the end of the month, as companies convert overseas earnings into rubles to pay taxes. Companies that rely on Russia for raw materials and commodities, especially European companies, will continue to be affected by the currency's volatility.

When looking for a source for ruble conversion rates, in particular, it's important to pay attention not only to the knowledge level of the rate provider, but also to the frequency with which its rate is updated. In other words, a corporate treasury team should examine the ruble exchange rate more than once a month. The ruble tends to get a slight lift at month-end, so if that were the only time a company marked its portfolio to market, it might have an artificially higher valuation of certain elements of the business.  

Brazilian Real

The Brazilian real has seen a spectacular fall from grace. In 2015, the real depreciated by 40 percent versus the U.S. dollar, as lower demand for commodities further squeezed Brazil's economy, which relies heavily on commodity exports. This further hurt Brazilian businesses, which were already feeling the pinch of a stubborn recession and tough austerity measures.

With major politicians under investigation for corruption, or exiting office altogether, Brazil inspires little confidence that either the real or the economy will stabilize in the near future. As we write this, impeachment proceedings for President Rousseff have begun, putting proposed economic reforms in further doubt.

In spite of these difficulties, many major corporations find themselves unable to pare down their Brazilian operations very much. For many businesses, the Brazilian economy is simply too large to abandon.

Consumption of domestic goods is on the rise. Nevertheless, 2016 promises to be a difficult year for corporate treasurers to manage revenues and earnings denominated in the Brazilian real. For starters, the country has a tricky tax jurisdiction that requires corporations which want to move capital out of Brazil to justify why the money should leave the country. On top of this, the country's proposed 2016 budget currently calls for a "financial transaction tax," which would levy a 0.2 percent fee on activities like currency exchanges and transfers.

Chinese Yuan

Between surprise devaluations, bouncy stock markets, lukewarm economic indicators, and a lift in retail sales, the Chinese yuan may be the currency that left investors and corporate treasurers doing the most head scratching in 2015.

The International Monetary Fund's (IMF's) designation of the yuan as an elite world currency (alongside the U.S. dollar, euro, pound, and yen) in late November should bring some stability and predictability to the currency, as China will relinquish some control to the financial markets. That said, the loosening of controls could also unleash uncertainty into the country's economy.

In the near term, all signs seem to be pointing toward an economic slowdown, which would possibly entail further cuts to China's interest rates and reserve requirement ratio, which dictates how much banks can hold in deposits and lend to consumers. That said, retail sales continue to rise at or near double-digit rates, which signals success in the government's program to steer the economy toward consumption.

An unexpected change to currency policy is never out of the question with the yuan. How a corporate treasurer should deal with the currency in Q1/2016 depends on what types of goods the business buys from or sells to China. Slowing industrial growth will continue to hurt companies that export commodities to China. But international retailers may see some growth as Chinese consumption increases.

Malaysian Ringgit

While Malaysia continues to offer promising economic growth prospects for specific industries, such as semiconductors and other niche electronics, the currency remains one of the weakest in the world. The ringgit hit a 17-year low against the U.S. dollar in 2015, hurt by the global slump in oil prices. As in Russia, the economy in Malaysia relies quite heavily on oil exports, especially after the government's push in 2013 and 2014 to invest in developing a sustainable long-term oil sector. The ill-timed move continues to depress overall economic growth.

One upside to the weak currency, however, is the attractiveness of Malaysian exports. Demand for electrical products and electronics manufactured in Malaysia will be a centerpiece of the country's trade balance growth in 2016. Domestically, sales may be crimped by the goods and services tax implemented last April.

All that said, oil prices will likely continue to dictate the path forward for the ringgit. Any corporate treasurers that are using FX rates in their forecasting, modeling, etc., will have to take oil prices into consideration. Treasurers should also consider that the Malaysian central bank is expected to avoid making any major changes to interest rates until later in the year.

Overall Outlook

We expect that many corporate finance departments will continue to be challenged by rapid, and sometimes unexpected, fluctuations of emerging-market currencies in the first quarter of 2016. Beyond the reaction to the Fed's interest rate decision, a host of external developments will continue to influence how these currencies move: oil prices, geopolitical turmoil, and unanticipated devaluations, to name a few.

Sourcing accurate rates for the lira, ruble, real, yuan, and ringgit already poses a challenge for treasury executives and others in corporate finance. These currencies are exchanged in much smaller volumes than the euro or U.S. dollar, which translates into a bigger spread—and a wider range of rates. Beyond developing a deeper understanding of how and why these currencies fluctuate, treasurers need to take a few specific steps to enhance the accuracy of the rates they're using in their projections and financial reporting:

Be selective, knowledgeable, and consistent in deciding where to procure FX rates.  Currency markets are over-the-counter and widely fragmented. This means many different prices can be valid at the same time. Discrepancies in the rates used by a company's different divisions, business units, and geographic regions are a prime cause of errors in international corporate finance departments.

The good news is that you don't have to pick a different source for each currency in your enterprise. Using a different source for every different exchange rate is not very manageable for a variety of reasons, but especially because it turns dissemination of rate data throughout your business systems into numerous IT projects, instead of one project. Selecting the right provider for all of the company's currency conversions boils down to understanding how prospective providers produce their rates. Two key questions to ask are:

• How does each provider produce its rates?  For financial data providers that manage many asset classes, FX might be a footnote in the product offering rather than a thoughtfully produced number. Asking this question will help you understand the effort going into the FX numbers.
• Are the rates transactable?  Since FX is an over-the-counter market, there is no central source of truth. Often the rates provided are "indicative," which means they are not rates at which actual transactions occurred. 

Automate the procurement of FX rate data.  This sounds like a simple step, but many corporations we've talked to still collect FX data on an ad hoc basis, then manually plug rates into their treasury, enterprise resource planning (ERP), and other systems. The best practice among the Big Four accounting firms and major global corporations is to have an automated feed from the company's preferred rate provider for each currency, and to plug that feed directly into the organization's ERP or treasury management interface. Automating the rate feed is also the best way to ensure that every department within the company is using the same rate.

The rate provider should be able to integrate its systems with your treasury management system or ERP software. We recommend designing the rate-update process to match your own internal workflow. In other words, this process is likely to vary for different companies depending on how such information is sourced and disseminated. For example, we've noticed with some companies that the controller is primarily responsible for sourcing FX rates, and rates are distributed from the systems the controller's organization uses (often an ERP system). This tends to be the case when the primary use of FX rates within the business is reporting.

In companies where FX risk is actively managed (especially for cash flows), however, treasury is often the group that sets the rates for the organization. In this case, it may make more sense to have the rate flow from the company's treaury management system to other financial systems, pricing modules, etc.

Automating FX rate updates is a common feature of most modern financial systems; often it's a straightforward integration that takes a couple of weeks to deploy and test. Ask your selected rate provider whether it already has an integration or plug-in with the system you use. If not, your provider can likely lead you to the appropriate technical resources to set up an automated FX data feed.

Procure new FX rate data on a daily basis.  Sourcing rates daily helps ensure that the currency values the company is using for key functions across the enterprise are as reflective as possible of what's happening in the market in real time. Many corporations we've spoken with still check rates at week-end, or even at month-end. Daily rate sourcing is a must for companies to ensure that decisions across the enterprise are being based on the most current FX data.

As the cost of hedging currency risk continues to rise, and as corporations seek to limit the cross-border currency hemorrhaging that may be affecting their balance sheets, treasurers are being pressed to heighten their knowledge about, and visibility into, FX rates. Given the unstable and unpredictable nature of the former emerging-market standouts, these five currencies are a natural place for treasurers to focus their energy throughout the current quarter.

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Natasha Lala is the managing director of OANDA's Solutions for Business group, which provides a full suite of FX services, trusted by the Big Four, tax authorities, and thousands of clients worldwide. Lala has been at OANDA since 2003 in a variety of executive roles, helping clients navigate FX markets. Previously, Natasha led large-scale client-facing initiatives in the CRM, telecom, and financial industries.