The Requisite Knowledge for Construction Professionals in the Middle East Regarding Foreign Exchange Currency Fluctuation Risk

Most international management frameworks, project guidelines and procedures always stress the benefits of proper risk management, with the increasing probability that a planned asset, project or portfolio achieves its objectives and ensures that overruns are avoided (Stephenson, 2015; Durst, et al., 2019). One of the common risk categories that is arguably not identified or quantified, and also poorly managed by construction professionals is the financial category (Burtonshaw-Gunn, 2016; Antón, et al., 2011; Kolhatkar, et al., 2013). In recent years, the unstable global and regional economies, the financial difficulties experienced by both the contractors and clients, and the unfavourable consequences observed at organisational levels, as a result, add pressure on the professionals in the region to explore ways to manage these risks more effectively (Mohamed, et al., 2013; El-Sayegh, 2008; Al-Sabah, et al., 2012; Albogamy, et al., 2013). However, the role and impact of the currency fluctuation (FOREX) risk, in particular, is still confusing and not appropriately managed at extensive levels (Ehrlich, et al., 2012; IMF , 2015, p. 54; Rocha, 2011).

This article aims to provide the practitioners on the area with an overview of the currency fluctuation risk within the context of the construction industry and the associated challenges, and it attempts to offer a framework for the regional companies that could mitigate the FOREX risk.