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Foreign exchange risk can be defined as: ‘The likelihood that an unexpected change in exchange rates will alter the home currency value of foreign currency cash payments expected from a foreign source. Also the likelihood that an unexpected change in exchange rates will alter the amount of home currency needed to repay a debt denominated in a foreign currency”.

Foreign exchange hedging

Foreign exchange risk can be defined as: ‘The likelihood that an unexpected change in exchange rates will alter the home currency value of foreign currency cash payments expected from a foreign source. Also the likelihood that an unexpected change in exchange rates will alter the amount of home currency needed to repay a debt denominated in a foreign currency”.

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