Transaction risk

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Foreign exchange risk

1.

The risk of changes in foreign exchange rates from the time a foreign currency-denominated transaction is entered into, until it is settled. This will result in changes in the domestic currency value paid or received.


2.

More broadly, the risks in 1. above, together with any secondary adverse effects, resulting from the changes described above.


Also known as transactional risk, transaction exposure or transactional exposure.


See also