Pre-transaction risk: Difference between revisions
imported>Doug Williamson (Link with Foreign exchange risk page.) |
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Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements. | Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements. | ||
For example, an exporter may need to publish | For example, an exporter may need to publish price lists in the currencies of its customers' local markets. | ||
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs. | Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs. | ||
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* [[Economic risk]] | * [[Economic risk]] | ||
* [[Foreign exchange risk]] | * [[Foreign exchange risk]] | ||
* [[Transaction]] | |||
* [[Transactional]] | |||
* [[Translation risk]] | * [[Translation risk]] | ||
* [[Transaction risk]] | * [[Transaction risk]] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Latest revision as of 11:22, 14 July 2022
Foreign exchange risk management
1.
Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.
For example, an exporter may need to publish price lists in the currencies of its customers' local markets.
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.
Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.
2.
The same as Contingent risk as applied to currency management.
Also known as pre-transactional risk, pre-transaction exposure or pre-transactional exposure.
