Currency risk: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Remove surplus link.) |
imported>Doug Williamson (Add link.) |
||
| (One intermediate revision by the same user not shown) | |||
| Line 20: | Line 20: | ||
* [[Currency]] | * [[Currency]] | ||
* [[Currency management]] | * [[Currency management]] | ||
* [[Devaluation]] | |||
* [[Redenomination risk]] | * [[Redenomination risk]] | ||
* [[Pre-transaction risk]] | * [[Pre-transaction risk]] | ||
* [[Transaction exposure]] | * [[Transaction exposure]] | ||
* [[Translation exposure]] | * [[Translation exposure]] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Latest revision as of 23:31, 20 November 2021
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, profit/loss in an income statement (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.
Also known as Currency exposure or Foreign exchange risk.
