Transaction exposure refers to the risk a company faces due to fluctuations in exchange rates between the time a transaction is initiated and the time it is settled in international business. It specifically relates to the effect of exchange rate movements on a company's obligations to pay or receive foreign currency cash flows, arising from commercial transactions like exports, imports, loans, and receivables or payables denominated in foreign currencies. Transaction exposure impacts the firm’s cash flows and profitability because the value of future cash inflows or outflows in foreign currencies may vary when converted into the home currency. Managing transaction exposure is critical for multinational firms to safeguard their financial health. The techniques to manage transaction exposure can be categorized into short-term and long-term strategies. In the short term, firms typically use financial hedging techniques. One of the most common approaches is the use of forward contracts. A forward