In today's business environment, treasury is an imperative tool for every corporate. Besides, there are many key risk challenges involved in it. This article defines the time horizons of treasury risk management and attempts to provide the solution to the same.

Understanding Treasury risk is imperative for each and every firm in the current era of globalization. One who understands the risks which the firm is facing will have the competitive edge in running the business. Treasury risk is the impact on the firm's cash flow due to the volatility in the prices of exchange rates and interest rates. With an effective treasury risk management, firms can protect themselves from future financial shocks and the predictability of future cash flows becomes relatively easy.

The risks that can be hedged with the help of risk management instruments are called transferable risks. For example, foreign exchange exposure can be a transferable risk. Those risks that are not transferable are called non-transferable risks and these risks have to be borne by the company facing them. For example, a company involved in making technology products may face the risk of its products getting outdated in case its competitors start making innovative products.

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