exchange risk
Exchange Risk
Currency risk is also called the foreign exchange risk or foreign exchange exposure, refers to a period of international economic transactions in foreign currency-denominated assets (or creditor) and liabilities (or debt), caused by fluctuations in the exchange rate and its value will go up and possibilities.
Risk of stake-holder including government, enterprises, banks, individuals and other sectors, they are facing the risk of exchange rate fluctuations.
Classification
1. Transaction risk
Transaction risk also referred to as settlement risk, refers to the use of foreign currency-denominated payment transactions, possibilities of economic subjects have suffered losses arising from exchange rate changes. It was a traffic risk.
Transaction risk is mainly manifested in the following aspects.
(1) in the import and export of goods, services, transactions, from contract signing to the loans settlement during this period, foreign exchange risks arising from exchange rate fluctuations.
(2) in international credits denominated in overseas currencies. Risks exist prior to debt outstanding.
(3) foreign exchange banks in foreign exchange trading foreign exchange positions, long or short positions in, also suffered because of the exchange rate risk.
2. Translation risk
Conversion risk is also called accounting risk (accounting risk) refers to economic agents in the process of balance sheet accounting treatment of, caused by exchange rate movements, changes in the value of overseas assets and liabilities arising from the risks. It is a stock risk.
Compared with the typical company, translation of foreign branches or subsidiaries of transnational corporations confronting risks is more complex. On one hand, when they are the host country's currency when recording and preparation of the financial statements, you will need to use the conversion of foreign currency into the currency of the host country, face conversion risk, on the other, when they
Currency risk is also called the foreign exchange risk or foreign exchange exposure, refers to a period of international economic transactions in foreign currency-denominated assets (or creditor) and liabilities (or debt), caused by fluctuations in the exchange rate and its value will go up and possibilities.
Risk of stake-holder including government, enterprises, banks, individuals and other sectors, they are facing the risk of exchange rate fluctuations.
Classification
1. Transaction risk
Transaction risk also referred to as settlement risk, refers to the use of foreign currency-denominated payment transactions, possibilities of economic subjects have suffered losses arising from exchange rate changes. It was a traffic risk.
Transaction risk is mainly manifested in the following aspects.
(1) in the import and export of goods, services, transactions, from contract signing to the loans settlement during this period, foreign exchange risks arising from exchange rate fluctuations.
(2) in international credits denominated in overseas currencies. Risks exist prior to debt outstanding.
(3) foreign exchange banks in foreign exchange trading foreign exchange positions, long or short positions in, also suffered because of the exchange rate risk.
2. Translation risk
Conversion risk is also called accounting risk (accounting risk) refers to economic agents in the process of balance sheet accounting treatment of, caused by exchange rate movements, changes in the value of overseas assets and liabilities arising from the risks. It is a stock risk.
Compared with the typical company, translation of foreign branches or subsidiaries of transnational corporations confronting risks is more complex. On one hand, when they are the host country's currency when recording and preparation of the financial statements, you will need to use the conversion of foreign currency into the currency of the host country, face conversion risk, on the other, when they