title: INVESTMENT RISK - Iqtisodiyotni raqamlashtirish sharoitida buxgalteriya hisobi, iqtisodiy tahlil va auditni xalqaro...
text: 792
  often perceived as risky by foreign investors, leading
  to decreased investment
  opportunities and economic growth. Therefore, managing external debt levels and
  implementing stable currency exchange rate policies are crucial for attracting foreign
  investors and promoting economic development. Foreign direct investment (FDI)
  has become an increasingly important source of capital
  for national economies
  around the world. However, attracting foreign investors is not always easy, as
  investment and currency risks can make potential investors hesitant to invest in a
  country.
  In this article, we will explore the impact of investment and currency risks
  on attracting foreign direct investments to national economies.
  Investment risk
  refers to the possibility of losing money on an investment due
  to a variety of factors,
  such as market fluctuations, changes in government policies,
  or unexpected events. Currency risk refers to the possibility of losing money due to
  changes in exchange rates between currencies. These
  risks can be particularly
  concerning for foreign investors, who may not be familiar with the local market
  conditions and regulations.
  Foreign investment risk is the financial risk of swift and acute changes in the
  value of investments due to external factors like changes in accounting, reporting and
  auditing standards.
  Nationalization. It refers to the transfer of private
  assets to the government
  often with no compensation e.g. Cuba expropriated all foreign-owned private
  companies after the Cuban Revolution in 1959 and Japan nationalized the Tokyo
  Electric Power Company after the Fukushima Daiichi nuclear disaster.
  Economic conflict. These can be trade wars like the one we see between the
  United States and China
  Political or diplomatic changes. Certain political
  parties in West Bengal have
  been resisting foreign investment in the state. This puts even existing investments at
  risk if they were to come in power.
  Currency risk
  or foreign exchange risk can happen when a company is having
  a transaction with a foreign company where one currency is stronger than the other.
  793
  The two types of currency risks are transaction and economic risks.