Currency risk

From ACT Wiki
Revision as of 06:13, 4 October 2013 by imported>Doug Williamson (Categorise page.)
Jump to navigationJump to search

The risk that arises from a change in currency rates.

This can take the form of:

  1. a receipt/payment of more or less home currency than expected when a transaction is settled (transaction risk)
  2. a change in asset/liability values in a balance sheet, profit /loss in an income statement (translation risk), or
  3. a change in competitiveness as rates change relative to buyers, suppliers or competitors (economic risk).

A more complex area of risk concerns contingent, or pre-transaction risk.

Also known as Currency exposure or Foreign exchange risk.


See also


Other links

Currency risk, Will Spinney, ACT 2009