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"Money!" CC BY-SA 2.0 Photo by Tracy O |
Gambling on the US Exchange Rate
Cross-border shoppers aren't the only ones groaning at the strong US dollar these days, library consortium managers and coordinators are letting out some sighs and grumbles too. With a portion of licensed content - sometimes up to 90% of a consortium's offerings - being negotiated and settled in USD, many Canadian and international consortia are using a variety of approaches to alleviate the pain of depreciating currencies. Some consortia, like BC ELN, use a strategy of forward purchasing. In anticipation of a rising US dollar, BC ELN purchases sums of USD when the rate is more favorable. This allows the consortium to pay for US subscriptions at a reduced rate, passing the savings onto its partner libraries. The Canadian Research Knowledge Network (CRKN) uses a forward contract approach. With these contracts, USD-CDN exchange rates are fixed in advance of paying the vendor, giving members a known exchange rate to plan for. One European consortium works with a publisher that guarantees the last year's exchange rate (or will use the current rate if it is more advantageous), though such generous arrangements are likely not common. Others work to negotiate contracts and pay for products in their own currencies. While all consortia search for strategies that will benefit their members the most (or harm them the least), to paraphrase a colleague at a European consortium: working with the US exchange rate is like gambling... sometimes you win, sometimes you lose. |