Monetary and macroeconomics - International finance
International finance is a division of financial economic that deals with monetary and macroeconomics interrelations between countries. It is also referred as international macroeconomics. It involves the economic relations between different countries and involving how the respective countries handle their monetary payments and the foreign exchange of currencies (Pilbeam 15).
International finance is the result of international trade; if there were no trade among countries, international finance would not have existed. The fact that most countries trade in their own currencies, the question of how the price of the products are determined, and paid comes up. In addition, the case of some countries lending and borrowing from one another during their trade. All these have been facilitated by international finance that has made international all the international transactions run smoothly (Levi 20).
[...] The changes in interest rates, inflation rates and exchange rates may affect investments and firms if their leaders do not anticipate. The economic risk results from the effect that exchange rates or all the rates, have on the prices of exports and quantities and thus on corporate income. In summation, international finance is the backbone of economies of many countries. Involvement in international trade has benefits to domestic countries. Investors should obtain knowledge in international finance matters so that they can lead their firms into the international business prosperity. [...]
[...] Monetary and macroeconomics interrelations between countries International Finance Introduction International finance is a division of financial economic that deals with monetary and macroeconomics interrelations between countries. It is also referred as international macroeconomics. It involves the economic relations between different countries and involving how the respective countries handle their monetary payments and the foreign exchange of currencies (Pilbeam 15). International finance is the result of international trade; if there were no trade among countries, international finance would not have existed. [...]
[...] In order to understand how international finance works, it is necessary to know what it constitutes (Pilbeam 32). The components of international finance include; foreign exchange, currency convertibility, international monetary system, international financial markets and balance of payments. Foreign exchange market It is a framework for trading of different foreign currencies. International finance involves the commercial relationship between the countries and involves the exchange of goods and services and the payments that follow these exchanges. Due to the required payments leads to the conversion of one currency into another (Ephraim, Levasseur & Rousseau 93). [...]
[...] Today, banks have spread their banks branches internationally to improve their international competition (Pilbeam 90). Eurocurrency market earlier known as Eurodollar assists in deposit of excessive cash effectively and conveniently. It provides loans to businesses and corporate for their working capital needs that include both imports and exports. Eurobond market helps in raising the long term debts by issuing of bonds as well as selling Eurobonds to other than the countries represented by the currency denominating them. International monetary system All countries have their own monetary system and authority that monitors and maintains the order of the system as well as to control trade and investment in the country (Ephraim, Levasseur & Rousseau 81). [...]
[...] It was to promote both economic and financial co-operation between the member countries. IMF monitors and oversees national, global and regional economic development of the member countries, as well as offering advice on economic policies (Pilbeam 86). It offers loans in hard currencies to support development and in a bid to correct the balance of payment. In addition, it offers training and technical assistance to the government and central bank officials. Today, IMF has 188 member countries. The World Bank It is a sister institution to the IMF that was established on 27th December 1945. [...]
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