The most frequent market risks that a client can be exposed to are exchange rate risk and interest rate risk. Both risks can adversely affect the cash flow and make business planning more difficult.
The exchange rate risk may lead to a decrease in the value of receivables expressed in HRK or other assets expressed in a foreign currency or an increase in a foreign currency liability. Importers and exporters are particularly exposed to exchange rate risk.
Debtors with loans with a variable interest rate (EURIBOR or LIBOR) are particularly exposed to the interest rate risk. An increase in reference rate may lead to an increase in interest payments of loans with a variable interest rate.
More information on the protection from market risks can be found here.