Foreign currency fluctuations commonly occur in commercial transactions. Foreign exchange fluctuations can either be beneficial or harmful to the business. Businesses that transact in different currencies are exposed to forex risks.
An example is a Kenyan individual that opts to buy a certain commodity from an American company in dollars. Assuming that the Kenyan individual only has Kenya shillings then to purchase the goods, he will have to convert his shillings to dollars to make the purchase.
