Exchange Risk

Exchange Risk in International Trade

Meaning of Exchange Risk, according to the Dictionary of International Trade (Global Negotiator): The possibility of receiving less or paying more money because a receivable or a payable is denominated in a foreign currency. Countries with shortages of convertible currencies reserves often resort to exchange control. Under these conditions, delays in payments often occur even after buyers have paid, while the central bank allocates the corresponding foreign exchange. See Oanda.