Annual Report 2024 2 4 0 NOTES TO THE FINANCIAL STATEMENTS 37 FINANCIAL INSTRUMENTS (CONTINUED) Market risk (continued) Currency risk (continued) Sensitivity analysis A 2% strengthening/ (weakening) of the United States dollar against the following currencies at the reporting date would have changed profit or loss by the amounts shown below, respectively. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecasted sales and purchases. Group Company 2024 2023 2024 2023 US$’000 US$’000 US$’000 US$’000 Euro 24 26 – 2 Swedish Krona 3 15 – – Singapore dollar 4 7 3 7 West African CFA franc 17 – – – Pound Sterling 40 5 – – Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Group’s exposure to interest rate risk arises primarily from their short-term interest bearing deposits, and loans and borrowings. As short-term bank deposits are placed in short-term money market with tenures mostly within the range of one day to three months, the Group’s interest income is subject to fluctuation in interest rates. Interest rate risk is managed by the Group on an ongoing basis and placed on a short-term basis according to the Group’s cash flow requirements with the primary objective of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates. Exposure to interest rate risk At the reporting date, the interest rate profile of the interest-bearing financial instruments, as reported to the management, was as follows: Group Note 2024 2023 US$’000 US$’000 Variable rate instruments Financial liabilities - Loans and borrowings 19 (142,083) (101,109)
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