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Assume you are the Treasurer for a Zimbabwean consumer products company which has significant amount of unhedged USS denominated liabilities. You are particularly (4 marks)

Assume you are the Treasurer for a Zimbabwean consumer products company which has significant amount of unhedged USS denominated liabilities. You are particularly (4 marks) 4| Page concerned about the stability of the ZWS, because a devaluation would make USS liabilities prohibitively expensive. Your economist presents two potential events, namely: i. A significant widening of the trade deficit, which puts pressure on the local currency, interest rates and equity markets. ii. A narrowing of the trade deficit, which is a positive scenario for local markets. Required With the aid of additional hypothetical information of your choice, explain how you will conduct a stress test for your company

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