Economics Exchange Rates Questions
Exchange rates can have a significant impact on international mergers and acquisitions. Fluctuations in exchange rates can affect the relative value of currencies, which in turn affects the cost of acquiring foreign companies. A stronger domestic currency can make foreign acquisitions more expensive, while a weaker domestic currency can make them more affordable. Exchange rate movements can also impact the profitability of merged or acquired companies, as they can affect the value of exports and imports, and the competitiveness of products in international markets. Additionally, exchange rate volatility can introduce uncertainty and risk into cross-border transactions, making it more challenging to negotiate and finance international mergers and acquisitions.