Generalized foreign exchange risks include interest rate risk, exchange rate risk, credit risk, accounting risk and national risk. In this chapter, we discuss risk from a narrow perspective.
From the perspective of foreign exchange transactions in the international foreign exchange market, the part that cannot be offset by trading gains and losses faces the risk of exchange rate changes. The foreign currency amount of this foreign exchange risk is called the insured part or foreign exchange exposure. Trading risk
Accounting risk
Economic risk 1. foreign exchange risk
Banking and foreign exchange transactions
Buying and selling proprietary trading on behalf of customers
2。 Foreign exchange credit risk: the risk brought to banks by the default of all parties in foreign exchange transactions.
3。 Settlement risk (settlement risk) The risk faced by all foreign exchange reserves of a country due to the depreciation of the reserve currency. It mainly includes the national foreign exchange inventory risk and the national foreign exchange reserve investment risk. Since 1973, the floating exchange rate system was implemented by the international community, foreign exchange reserves of all countries in the world are facing the same operating environment, that is, the reserve currencies are diversified, the reserve currencies are mainly US dollars, and the exchange rate of reserve currencies including US dollars fluctuates greatly. In this way, the foreign exchange reserves of various countries are facing great risks. As foreign exchange reserves are the most important part of international liquidity and an important symbol of a country's national strength, once the risks faced by foreign exchange reserves become a reality, the consequences will be very serious. From the perspective of its fields, foreign exchange risk can be roughly divided into two categories: commercial exchange rate risk and financial exchange rate risk.
Commercial exchange rate risk: Commercial exchange rate risk mainly refers to the possibility of people suffering losses due to exchange rate changes in international trade, which is the most common and important risk among foreign exchange risks.
Financial exchange rate risk: Financial exchange rate risk includes credit and debt risk and reserve risk.