What is economic exposure?

Date:2023-01-06
Economic exposure, also known as operating exposure, is the risk that changes in exchange rates will affect a firm's competitive position or the value of its assets and liabilities denominated in foreign currencies. It is a measure of the potential loss or gain that may result due to unexpected changes in exchange rates. These changes can affect a company's competitiveness on export and import markets, as well as its ability to procure materials from foreign suppliers. Economic exposure can also have a significant impact on a company's profitability.
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