What is financial exchange rate risk

Financial risk means that in international economic and trade exchanges, due to the change of exchange rate or, we often encounter losses at hand.

This possibility of economic loss of foreign exchange constitutes financial exchange rate risk.

Financial exchange rate risk is one of the two types, the other is commercial foreign exchange risk.

It includes debt risk and reserve risk.

Credit and debt risk refers to the possibility that a party will suffer losses due to changes in the exchange rate of international loans;

Reserve risk refers to the possibility that the real value of assets held by countries, banks, and companies will decrease due to changes in exchange rates.