Sovereign Risk

What Does It Mean?
What Does Sovereign Risk Mean?
The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign-exchange contracts.
Investopedia Says
Investopedia explains Sovereign Risk
This is one of the many risks that an investor faces when holding forex contracts. Additionally an investor is exposed to interest-rate risk, price risk and liquidity risk amongst others.
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