Sovereign risk

Sovereign risk
The risk that a central bank will impose foreign exchange regulations that will reduce or negate the value of FX contracts. Also refers to the risk of government default on a loan made to it or guaranteed by it. The New York Times Financial Glossary

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   Risks associated with lending funds to, or making an investment in, a particular country. Also known as country risk.

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sovereign risk UK US noun [C or U] FINANCE, ECONOMICS
COUNTRY RISK(Cf. ↑country risk): »

Such investments involve sovereign risk in addition to the normal risks associated with securities of US issuers.


Financial and business terms. 2012.

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