Currency risk: Difference between revisions
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imported>Doug Williamson (Make the FX context explicit) |
imported>Doug Williamson (Link with Currency management page.) |
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* [[Contingent risk]] | * [[Contingent risk]] | ||
* [[Cross-currency interest rate swap]] | * [[Cross-currency interest rate swap]] | ||
* [[Currency management]] | |||
* [[Foreign exchange risk]] | * [[Foreign exchange risk]] | ||
* [[Transaction exposure]] | * [[Transaction exposure]] | ||
Revision as of 15:42, 17 November 2015
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:
(i) a final receipt/payment of a different amount of domestic currency equivalent, than expected when a currency transaction was committed to (transaction risk), or
(ii) a change in asset/liability values in a balance sheet, profit/loss in an income statement (translation risk), or
(iii) 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.
See also
- Contingent risk
- Cross-currency interest rate swap
- Currency management
- Foreign exchange risk
- Transaction exposure
- Translation exposure
