Exchange Risks and Real Interest Rates

Jacques Riboud

Chapter 9 in A Stable External Currency for Europe, 1991, pp 106-113 from Palgrave Macmillan

Abstract: Abstract Exchange risks are always present in international banking operations. Just mentioning an exchange risk is enough to paralyse initiative even before the possibilities and any financial effects have been evaluated, considered and analysed. In an ES system the risk would be that indexed liabilities might be balanced, on the assets side, by reserves in national currencies or other assets which were not indexed, or the other way around. This would give rise to a situation which could be compared to an exchange risk.

Keywords: Interest Rate; Exchange Risk; Real Interest Rate; Real Rate; Nominal Interest Rate (search for similar items in EconPapers)
Date: 1991
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DOI: 10.1007/978-1-349-11821-2_10

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