What are the Risks Associated with Foreign Exchange Services?
While foreign exchange services offer numerous benefits, they also come with risks:
1. Exchange Rate Risk: Fluctuations in exchange rates can lead to financial losses. 2. Credit Risk: The risk that a counterparty will default on a contract. 3. Liquidity Risk: The risk that a business will not be able to buy or sell currencies without causing a significant impact on the exchange rate. 4. Operational Risk: Risks arising from failures in systems, processes, or controls.