Foreign currency risk, otherwise called exchange rate risk, is the budgetary risk emerging from vacillations in the estimation of a base currency against a foreign currency in which an organization or individual has resources or commitments. Foreign currency risk happens when there are cross-border operations including more than one currency. Negative exchange rate vacillations between the currency in the nation where an organization or individual is based and the currencies of the nations in which they work can severely reduce and even crash overall revenues.