What makes hedging emerging-market currency exposure difficult, and how would you approach it?

EM currencies are hard to hedge for several reasons: forward hedging cost (carry) is often very high because EM interest rates are high, so the forward locks in a materially worse rate; liquidity is thin and tenors short, especially in stress; some currencies are non-deliverable or restricted, forcing the use of NDFs (cash-settled, no physical delivery) and introducing basis to the onshore rate; and capital controls or central-bank intervention can break the relationship between the hedge and the actual cash flow. Approach: first reduce exposure operationally (price/invoice in hard currency, local-currency funding to create natural hedges, match local revenues and costs); hedge the residual selectively — focus on near-term, higher-certainty exposures where the carry cost is justified, use NDFs where forwards aren't available, and accept that hedging 100% of a high-carry EM exposure is often uneconomic. It's a cost-benefit judgement, not full coverage.