Currency risk and Debenture: Difference between pages

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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.  
A certificate in which a company acknowledges a debt for a specified sum on which interest is normally due until the principal is paid back.


 
Some debentures are interest free.
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.




== See also ==
== See also ==
* [[Contingent risk]]
* [[Bond]]
* [[Cross-currency interest rate swap]]
* [[Building a Debt IR function]]
* [[Currency]]
* [[Debt]]
* [[Currency management]]
* [[First mortgage debenture]]
* [[Redenomination risk]]
* [[Floating charge]]
* [[Foreign exchange risk]]
* [[Floating charge debenture]]
* [[Transaction exposure]]
* [[Indenture]]
* [[Translation exposure]]
* [[Receiver]]
 
* [[Secured debt]]
 
===Other links===
[http://www.treasurers.org/node/5281 Currency risk, Will Spinney, ACT 2009]


[[Category:Manage_risks]]
[[Category:Compliance_and_audit]]

Latest revision as of 11:17, 3 November 2021

A certificate in which a company acknowledges a debt for a specified sum on which interest is normally due until the principal is paid back.

Some debentures are interest free.


See also

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