An operation in order to protect the domestic currency value of an asset or a liability that is denominated in foreign currency is called as

An operation in order to protect the domestic currency value of an asset or a liability that is denominated in foreign currency is called as Hedging. A risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, or securities. In effect, hedging is a transfer of risk without buying insurance policies.