Suppose a firm imports goods from Europe and the import price is denominated in euros, then

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The importer bears foreign exchange risk as they are the ones who have to convert their domestic currency into euros to pay for the imported goods. If the value of their domestic currency decreases relative to the euro, they will have to pay more in their domestic currency to purchase the same amount of euros. This can result in higher costs for the importer. The central bank and exporter do not necessarily bear foreign exchange risk in this situation.

Suppose a Firm Imports Goods from Europe and the Import