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Explain the relation with foreign exchange risk

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Reference no: EM133056092

Platinum bank, an Australian bank, has made a huge volume of loans to Indonesian firms. Currently, 35 percent of Platinum's balance-sheet loans to Indonesian firms are issued in AUD.

1. Explain the relation with foreign exchange risk and credit risk using Platinum bank's scenario.

2. What steps may Platinum bank do to reduce the risk(s)? List two possibilities.

Reference no: EM133056092

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