The topic of FX exposure is also covered in Nomentia’s whitepaper on Foreign Currency Risk Management.


FX Risk Exposure

FX Risk can broadly be classified into three types: Transaction Risk, Translation Risk and Economic Risk.

Transaction risk is the risk that arises from transactions denominated in foreign currencies and can affect the cost of goods and services, while Translation risk is a risk of ownership that arises from subsidiaries located overseas trading in foreign currencies. Economic risk, on the other hand, results from fluctuations in interest rates and can affect the entire organization

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