b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)Forassetsandliabilitiesthatarerecognizedinthe addition,Staatsoliemonitorsadesiredratioforitsconsolidatedfinancialstatementsonarecurring availablecashinUS$tofulfillitsforeigncurrencybasis,Staatsoliedetermineswhethertransfers businessobligations.Furthermore,Staatsoliehave occurred between levels in the hierarchyacceptstherisksofpricefluctuationsofoilbyreassessingcategorization(basedonthe products,whiletakesintoaccountaconservativelowest-levelinputthatissignificanttothefairvalue low price for its work program and budget. measurement as a whole) at the end of each reporting period. Interest rate riskFinancial risk management objectives andInterest rate risk is the risk that the fair value or policiesfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestMarket risk rates.TheGroupsexposuretotheriskofchangesin market interest rates relates primarily to the Marketriskistheriskthatthefairvalueoffuture Groupslong-termdebtobligationswithfloatingcashflowsofafinancialinstrumentwillfluctuate interest rates.becauseofchangesinmarketprices.Marketriskcomprisesthreetypesofrisk:commodityprice Interest rate sensitivityrisk,interestrateriskandforeigncurrencyrisk.Financial instruments affected by market riskThefollowingtabledemonstratesthesensitivityincludeloansandborrowings,deposits,trade to a reasonably possible change in interest rates receivables,tradepayablesandaccruedliabilities. on that portion of loans and borrowings affected. Withallothervariablesheldconstant,theGroupsMarketrisksduetointerestrate(LIBOR)riskhave profitbeforetaxisaffectedthroughtheimpactonbeen accepted and is evaluated and managed asfloatingrateborrowings,asfollows:part of the portfolio risk management policies. In (x US$ 1) Increase / decrease inEffect on profit before taxEffect on profit before tax basis points Corporate term loan Loan SPCS2018US dollar +60 (3,750) (424)-60 3,750 4242017US dollar +60 1,595 470-60 (1,595) (470)Foreign Currency risk Commodity price riskForeign currency risk is the risk that the fair valueTheGroupisexposedtotheriskoffluctuationsinorfuturecashflowsofanexposurewillfluctuate prevailing market commodity prices on the mix of because of changes in foreign exchange rates.oilproductsitproduces.TheGroupspolicyistoTheGroupsexposuretotheriskofchangesin managetheserisksthroughtheuseofcontract-foreign exchange rates relates primarily to thebased prices with customers. As mentioned in GroupsoperatingactivitiesofsubsidiaryGOw2 themarketrisksectionabove,Staatsolietakes(as revenues and expenses are denominated in aaconservativelow-priceapproachforitsworkforeign currency).program and budget. TheGroupmanagestradetransactionsby Theanalysisisbasedontheassumptionthatoffsetting local payments and local receivableschanges in the crude oil price result in a change of in SRD creating a natural hedge for the SRD10%inthesalepricesoftheoilproducts,withalltransactions. other variables held constant. Reasonably possible movements in commodity prices were determined basedonareviewofthelasttwoyearshistoricalpricesandeconomicforecastersexpectations.110 STAATSOLIE 2018 ANNUAL REPORT'