Brexit Raises Concerns about FX Exposures, Cash Pooling

While the U.K. is scheduled to quit the European Union in March 2019, Brexit negotiations are moving at a glacial pace, leaving the details surrounding the U.K.’s departure unclear. In fact, at this point, the only thing that seems clear about the U.K.’s split with the EU is the considerable uncertainty involved.

Not knowing what is going to happen is what’s difficult for corporate treasuries, said Damien McMahon, a partner in the finance and treasury management practice at PwC. “Once it’s announced, then we can plan for it, then we can hedge it. When it’s undecided, that’s the difficult period.”

U.K. Prime Minister Theresa May recently proposed a two-year transition period that would allow the U.K. to remain in the single market through 2021.