THE IMPACT OF RISK OF EXCHANGE RATE FLUCTUATIONS ON CORPORATE PROFITS-A REVIEW

Abstract

The study aims to clarify the effect of the dangers of fluctuations in local currency exchange rates and company profits, which is considered one of the risks associated with the international activities of companies. The study problem was identified with questions revolving in its tracks about the extent to which bank profits are affected by fluctuations in exchange rates, by reviewing the literature The previous discussion on this topic, and the researchers found an update of that literature that any change in the exchange rates did not reflect a positive change in profits, and the study recommended the necessity of reviewing the previous exchange rates due to the great role that forecasts play to form part of the prediction of exchange rates for the coming years, which in turn It reduces the losses that incoming companies may be exposed to on new investments. Hence, the importance of managers adopting traditional and modern technical methods to forecast exchange rates and ways to avoid them .