Economic risk

This refers to a type of financial risk, typically a foreign exchange risk.

Economic risk may affect a company directly (for example, if a company’s products become more expensive than an overseas competitor’s as a result of a rise in their home country’s exchange rate) or indirectly (for example in global markets where a change in a competitor’s home currency may give it an advantage in other overseas markets).

Economic risk is a type of foreign currency risk and is a term normally found in financial management and business economics.

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