Definition for : Currency risk

Currency Risk is due to fluctuations in exchange rates that can Lead to a loss in Value of Assets denominated in foreign currencies. The variuos currency Risks include Commercial currency risk, Financial currency risk, and Accounting currency risk. Similarly, higher exchange rates can increase the Value of Debt denominated in foreign currencies when translated (see Translation) into the company's reporting currency Base. Currency Risk is also called Exchange risk, Foreign exchange risk.

(See Chapters Chapter 18 Risk and return and Chapter 49 Managing working capital of the Vernimmen)

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