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What Type of Risk Is Hedged Using an NDF?

Foreign Exchange (FX) risk, particularly for exposures in non-convertible or restricted currencies.
Greeks.Live24.11.25

What Type of Risk Is Hedged Using an NDF?

The primary risk hedged using an NDF is foreign exchange (FX) risk, specifically the risk associated with a non-convertible or restricted currency. Corporations use it to lock in an exchange rate for future transactions, protecting their financial statements from adverse currency fluctuations.

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