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Foreign Exchange Risk Management involves strategies and techniques used by organizations to mitigate potential financial losses resulting from fluctuations in foreign currency exchange rates. This includes identifying, assessing, and managing the risks associated with conducting business transactions in multiple currencies. Various tools such as hedging, forward contracts, options, and swaps are utilized to minimize the impact of currency fluctuations on the financial performance of the organization. Effective foreign exchange risk management helps to protect against potential losses and maintain financial stability in an increasingly globalized business environment.