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The danger of incurring financial loss because of adverse changes in exchange rates is known as currency risk. It may be difficult to figure out how a company’s cash flow will be impacted by changes in the value of a particular currency. The following procedures may be used to mitigate foreign exchange risks.
1. Analyse your operating cycle.
2. Recognize your distinct currency flows
3. Determine your own guidelines for FX risk management and adhere to them.
4. Limit your currency risk exposure
5. Save time by having foreign exchange procedures automated.”