What gives rise to the currency exposure at AIFS?

AIFS faces currency risks because it is active in many different countries, each with their own currencies. This means that any fluctuations in exchange rates can have an immediate impact on the organization’s bottom line; for example, if the US dollar strengthens against another currency then AIFS might be forced to charge more for its services if it wishes to remain profitable.

AIFS may also have foreign suppliers or customers that do not wish to/cannot pay/receive in USD. This may lead to further complications, as the exchange market may be required, resulting in additional costs. Last but not least, changes to tax laws in these countries may also have an impact on the profits AIFS generates through its international activities.

Overall there are many factors which contribute towards AIFS’s currency exposure and it is important for the company to understand and manage these risks accordingly in order maximize profits while minimizing losses.