How currency fluctuation affect Import & Export Trade

Why Dutch exporters and East African importers can’t ignore exchange rates

Small exporters in the Netherlands selling into East Africa — and East African businesses buying Dutch machinery, inputs or agro-products — live and breathe the EUR ↔ local-currency rate. In 2025 the euro strengthened against several East African currencies (for example, EUR→KES moved from ~133 KES at the start of the year to averages around 145–150 KES later in 2025), amplifying costs for Kenyan buyers and squeezing margins for traders who price locally. Traders who invoice in euros gained predictability, while those who invoice in local currency absorbed unexpected currency costs. 

How this plays out on profit lines

There are three common scenarios: 

(1) Dutch seller invoices in EUR and East African buyer pays in euros — buyer faces higher local-currency cost if their currency weaken.

(2) Seller invoices in KES (or other local currency) — seller takes exchange-rate risk and can see margins evaporate if KES weakens against EUR. 

(3) Hedged trades — when parties use forward contracts or FX hedges to lock rates. 

For small businesses, hedging costs and minimum contract sizes often make formal hedging unaffordable, which pushes many to absorb risk or add buffer margins.

Macro shocks and trade policy risks

Exchange-rate swings are not only about central-bank moves: regional trade rulings, shifts in commodity prices, and trade agreements affect capital flows and currency stability. Recent legal and policy developments around trade agreements between Kenya and the EU have increased short-term uncertainty for exporters who rely on duty-free access or prefer predictable tariffs — uncertainty that can feed into currency volatility and funding costs.

Practical steps to protect profits (short checklist)

Businesses involved in international trade should actively manage currency risk. The following strategies can help reduce exposure:

a. Use Forward Contracts A forward contract allows businesses to lock in an exchange rate for future transactions, reducing uncertainty.

b. Invoice in Stable Currencies Many international companies use stable currencies such as the euro or US dollar for trade agreements.

c. Diversify Markets and Suppliers Operating in multiple countries reduces dependence on a single currency.

d. Shorten Payment Terms Faster payment cycles reduce the period during which exchange rates can fluctuate.

e. Maintain Multi-Currency Accounts Holding different currencies allows businesses to manage payments more efficiently.

f. Monitor Currency Markets Businesses should regularly track exchange rates and economic developments.

g. Work with Financial Advisors and Banks Professional financial guidance can help companies design effective currency risk management strategies.

h. Include Currency Clauses in Contracts Contracts can specify how exchange rate changes will be handled if fluctuations exceed certain limits

👉Call to Action

If you trade between the Netherlands and East Africa: review your last 6–12 months of invoices, identify which currency you and your partners use, and set one quick policy (pricing, a buffer percentage, or a pilot hedge) to deploy this quarter. 

Need help choosing a hedge or drafting FX clauses? Ask here — we’ll draft language and a 1-page checklist.

👉Interested in reading more about this topic? A detailed, downloadable PDF version of this article is available.

👉Comments / Your input

Have you been hit by a currency move this year? Which currency do you invoice in, and what tools (if any) do you use to manage FX risk? Leave a short comment — we’ll summarize practical reader solutions in the next update.