What specific problems does foreign exchange present in an organization?
The organisation is put to exchange risk. This means that for thesame product, if a business contracts with seller for a specificamount due to rate fluctuations, that will be paying more. Thecustoms duty structure, VAT etc are directly linked to such rateswhich will have further impact. Cash outflow also increases therebystraining the working capital requirements. In short, this directlyaffects the profitability of a project/business.
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