Foreign exchange risk: Difference between revisions

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*A final receipt/payment of a different amount of domestic currency equivalent, than expected when a currency transaction was committed to (transaction risk)
*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 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 change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk).  


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Also known as Currency exposure or Currency risk.
Foreign exchange risk is also known as Currency exposure or Currency risk.
 




== See also ==
== See also ==
* [[Deal contingent forward]]
* [[Economic risk]]
* [[Economic risk]]
* [[Exchange controls]]
* [[Exchange controls]]
* [[Foreign exchange]]
* [[Foreign exchange]]
* [[Forward contract]]
* [[Lagging]]
* [[Lagging]]
* [[Leading]]
* [[Leading]]
* [[MRBB]]
* [[Market Risk in the Banking Book]]  (MRBB)
* [[Net investment hedge accounting]]
* [[Pre-transaction risk]]
* [[Pre-transaction risk]]
* [[Risk management]]
* [[Transaction risk]]
* [[Transaction risk]]
* [[Translation risk]]
* [[Translation risk]]
==Other resource==
*[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]]
[[Category:Manage_risks]]

Latest revision as of 02:06, 23 May 2024

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


Other resource