Consignment in International Trade Consignment in international trade is described as a variation of open account. In this arrangement, payment is sent to the exporter only after the goods have been sold by the foreign distributor to the end customer. The transaction is based on a contractual arrangement. Under a Read more
A Letter of Credit (L/C) is identified in the sources as a method of payment used in international trade. It is described as a written obligation and a formal document issued by a bank on behalf of a customer. The fundamental purpose of an L/C is to ensure that the Read more
An Open Account is identified as a method of payment used in international trade. It is categorized as a form of trade credit. Trade credit, in general, arises when a firm purchases goods from another firm and is not required to pay for them immediately. During the period before payment Read more
International trade transactions between an exporter (seller) and an importer (buyer) are complicated by concerns that one party might not fulfil its obligation to the other. The exporter is typically concerned about receiving payment from the importer. There’s also a risk that the importer’s government could impose exchange controls preventing Read more
Foreign exchange risk management is a critical component of any business involved in international transactions. It encompasses the identification, assessment, and mitigation of risks that arise from fluctuations in foreign currency exchange rates. Due to the increased globalization of business and financial markets, coupled with the growth of international trade Read more
The Foreign Exchange Market (Forex, FX, or currency market) is a market in which currencies are bought and sold. It is distinct from a financial market where currencies are borrowed and lent. The primary purpose of the foreign exchange market is to permit transfers of purchasing power denominated in one Read more
Introduction to International Financial Management International Financial Management is defined as the management of finance in an international business environment. It is essential to study IFM because we are currently living in a highly globalized and integrated world economy. This trend towards globalization and integration is expected to continue due Read more