Foreign exchange risk: Difference between revisions
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* [[Pre-transaction risk]] | * [[Pre-transaction risk]] | ||
* [[Risk management]] | * [[Risk management]] | ||
* [[Risks of ownership]] | |||
* [[Risks of trading]] | |||
* [[Transaction risk]] | * [[Transaction risk]] | ||
* [[Translation risk]] | * [[Translation risk]] | ||
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*[https://www.treasurers.org/hub/blog/future-leader-perspectives-FX-risk-management ACT Future Leaders Perspectives - FX risk management] | *[https://www.treasurers.org/hub/blog/future-leader-perspectives-FX-risk-management ACT Future Leaders Perspectives - FX risk management] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Latest revision as of 19:03, 9 April 2025
The risk of losses or other adverse effects resulting from a change in a foreign exchange rate, or from other unfavourable changes in relation to a foreign currency.
Examples include:
- A final receipt/payment of a different amount of domestic currency equivalent, than expected when a currency transaction was committed to (transaction risk)
- A change in asset/liability values in a balance sheet, or profit/loss in an income statement or both (translation risk)
- A change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk).
A more complex area of foreign exchange risk concerns contingent, or pre-transaction risk.
Foreign exchange risk is also known as Currency exposure or Currency risk.
See also
- Deal contingent forward
- Economic risk
- Exchange controls
- Foreign exchange
- Forward contract
- Lagging
- Leading
- Market Risk in the Banking Book (MRBB)
- Net investment hedge accounting
- Pre-transaction risk
- Risk management
- Risks of ownership
- Risks of trading
- Transaction risk
- Translation risk
