From an operational perspective, foreign exchange risk is defined as the possibility of loss to the ‘b sinless unit on account of  unfavorable movement in foreign exchange rates.,Foreign exchange ‘risk management (GERM) i the process through’ which   inane managers try to eliminate reduce the adverse impact of unfavorable changes in the foreign exchange rates to a tolerable  elev, This  Section describes the four major external techniques of the FERM(also known as derivatives)” and money market   operations. Derivatives are forward contracts  currency futures, (Hi) currency options and (iv) swaps,

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