Remeasurement Currency Risk

In currency terms, Remeasurement Currency Risk is a treasury concept referring to the risk currency volatility poses to a company’s financial statements due to alterations in the value of assets…

Repatriation of profits

Companies with profits made in foreign countries under a different currency periodically repatriate their profits into the company home currency. Operating in more countries means access to more customers and thus,…

Reporting currency

Reporting currency is a financial term used in the corporate treasury to define the currency used by a parent company in the financial statements to make easier the…

Reserve currency

A reserve currency is a currency that central banks hold as part of their foreign exchange reserves. This currency is often used for their international transactions. Reserve currencies are always strong…

Reset Forward

A reset forward is a derivative contract that protects buyers against adverse movements in currency markets, allowing them to benefit from favourable movements within a certain range, limited by the…

Restricted currency

In contrast with the free-floating currencies, restricted currencies are those subject to currency controls, that is, limits imposed by their respective governments to guarantee a certain stability on…

Revolving credit

A revolving credit is a financial arrangement in which a bank or other lending institution allows a business or individual to borrow funds for purchases or investments as they require…

Risk diversification

Risk diversification consists of spreading risk out into numerous areas to ensure that the potential negative effects of exposure to any one variable are limited. More info

Risk management framework

A risk management framework (RMF) is the structured process used to identify potential threats to an organisation and to define the strategy for eliminating or minimising the impact of these…

Risk premium

In finance, a risk premium is the extra compensation that a risky asset yields to a holder, in comparison with a risk-free asset. In foreign exchange terms, a risk premium can…

Rolling Hedge

A rolling hedge is a risk minimisation strategy that involves closing an expiring or about-to-expire hedging product and simultaneously opening a new contract, pushing back the maturity date of the…

Rolling Positions Forward

Rolling Positions Forward, Roll Forward or Roll Over are expressions referring to the extension of a future or forward contract maturity date. In order to roll over a forward contract,…

Sanctions Screening

Sanctions screening is a centralised service for members of SWIFT (the Society for Worldwide Interbank Financial Telecommunication) to comply efficiently with international sanctions regulations. Should a company directly or unwittingly authorise…

Segregated bank account

Segregated bank accounts are accounts meant to hold the funds of a customer separated from the funds of a FX or brokerage company in the interests of the customer’s security. Segregated bank…

Sensitivity analysis

The concept of sensitivity analysis in corporate finance refers to a technique used by businesses exposed to currency risk to test the resilience of a company or…