FLUCTUATION RISK
INTRODUCTION
Both importers and exporters run the risk of loss due to
fluctuations in the foreign exchange rates in international
business transactions. An exporter who agrees to a certain
price in a foreign currency today may find himself at a loss
after a few months when the actually receives the payment
owing to a fall in the exchange rate of the contracted
currency. Likewise, an importer’s fortunes may also swing
up or down with exchange rate movements.