International Finance for Trade and Commerce

International trade involves international financial transactions because different countries have different units of money. When your nation wish to buy goods from other nations, they usually must pay for the goods in the currency of the exporting country. In other words, Japan will probably demand yen, France will demand francs, West Germany will want deutsche marks, Great Britain will insist on pounds, and Mexico will demand pesos in payment for the goods they sell. Foreign currencies are called foreign exchange, and they are bought and sold in foreign exchange markets, which are markets that deal in the buying and selling of foreign currencies. Some banks specialize in financing international trade, and they are the major participants in foreign exchange markets. If an American importer wishes to buy automobiles from a Japanese manufacturer, the importer will go to a bank that specializes in financing international trade, and will exchange dollars for yen.

Exchange Rates: The foreign exchange rate is the price of one currency in terms of another. For example, the British pound might be worth 76 times more in Indian money. Historically, there have been two major types of foreign exchange rates: fixed exchange rates and flexible exchange rates.

Under the fixed-exchange-rate system, the price of one currency was fixed in terms of other currencies so that the rate did not change. The advantage of such a system is that importers and exporters know exactly how much foreign currency they can purchase with a given quantity of their own nation’s currency today, next week, or six months from now. Foreign exchange markets operated under a fixed-exchange-rate system from 1944 until the year early 1970. Prior to 1971, the value of the United States dollar was tied to gold at the rate of $1 equals 1/35 of an ounce of gold. In other words, one ounce of gold was equal to $35 in American money. Since the value of other currencies was also fixed in relation to gold, the dollar price of each foreign currency remained constant.

The disadvantage of the fixed-rate system was that it did not make allowances for changing economic conditions in various countries. For example, if the developed country like United States of America was experiencing high inflation at a time when Japan or China was experiencing little or no inflation, American-made goods would become increasingly expensive in relation to goods made in Japan or in China. As a result, Japan or China would purchase fewer American-made goods while Americans would tend to buy more goods made in Japan or in China. This in turn would lead to a serious imbalance in imports and exports between the two countries.

With a flexible-exchange-rate system, the type of system under which world trade operates today, the forces of supply and demand determine the value of a country’s currency in terms of the value of other currencies. Therefore, under this system, the price of a country’s currency can fluctuate up and down daily in response to market conditions.

The supply and demand for foreign exchange usually are largely determined by the supply and demand for goods and services. For example, if United States of America importers wish to import increased quantities of goods from a country, suppose from Japan, there will be a strong demand for the Japanese yen. This could force the price of the yen up substantially unless Japan was at the same time providing a large supply of yen in order to increase their imports from the United States of America. The demand for goods and services is not the only factor that determines the demand for a nation’s currency. Political or economic instability in other countries may cause people in those countries to exchange their currency for a more stable currency, such as the dollar of United States of America. In addition, high interest rates in a particular country may cause foreign investors to convert their currencies into the currency of that nation. This happened in the United States of America during the early 1980s. Interest rates became so high in this country that many foreign investors were prompted to exchange their currency for American dollars for investment purposes. This increased demand for dollars caused the value of the dollar to increase in terms of other currencies. The “strong” dollar made American-made products more expensive in world markets. As a result, Americans bought more foreign-made products, and foreigners bought fewer American-made products.

Balance of Trade: The amount of goods and services that a nation sells to other nations, and the amount it buys from other nations, are not always equal. The difference between the dollar value of exports and the dollar value of imports is called the balance of trade. If the United States exports more goods to foreign nations than it imports from foreign nations, it has a trade surplus. However, if the United States of America imports more than it exports, it has a trade deficit.

In 1971, the United States recorded its first trade deficit of the century. In all the years since then, except in 1975 when there was a modest surplus, the United States has imported more than it has exported, and the trade deficits of recent years have been so large that they have caused major concern among some economists.

However, not all economists agree on how serious a problem the trade deficits are, or even on their causes. Some believe that, in the long run, market adjustments will correct the problem. Others are not so sure. Some economists believe that the high trade deficits are linked to the large deficits in the federal government’s budget in the past two decades. They argue that heavy government borrowing to finance high budget deficits helps to keep interest rates high and encourages foreign investors to exchange their foreign currencies for dollars. However, so many things influence the trade deficits that it is not always clear which factors are playing the biggest role in the deficit at any specific time. The one thing that is clear is that the United States must increase its competitiveness in world markets. Like it or not, the world is moving rapidly toward a global economy. The volume of international trade is bound to grow rapidly in the decades ahead. Competition is still the name of the game, but the number of players has increased.

Balance of Payments: Economic relations between nations involve much more than just imports and exports. There are many different kinds of transactions that involve the exchange of money between nations. For example, American businesses invest funds in foreign nations, and American banks make foreign loans. In addition, the United States government spends money for foreign aid and to support military personnel stationed abroad. Americans spend money for goods and services when they travel abroad, and American citizens often send money to relatives living in other nations. On the other hand, money flows into the United States from other countries when foreign citizens travel in the United States, when foreign businesses make investments in the United States, when Americans receive dividends on foreign investments, and so forth.

Each nation keeps an accounting record of all its monetary transactions with other countries. This accounting record is called the balance of payments. A nation’s balance of payments account includes all payments that it makes to other nations, and all payments it receives from other nations during a year. A country’s balance of payments includes imports and exports, flows of investment funds into and out of the country, loans between nations, and all other transactions that involve payments between countries. The balance of payments is a broader measure of the financial transactions between countries than the balance of trade.

ntc100.xyz ntcvan.xyz nt-e-a.xyz nthreo.xyz nyhzpt.xyz nverio.xyz ntrf44.xyz nyezee.xyz nwtyba.xyz nvopal.xyz nvhego.xyz nyarin.xyz ntvdvr.xyz nydesk.xyz nwvaid.xyz nxulak.xyz nyarka.xyz nxfxlx.xyz nvapai.xyz nzyrht.xyz nwisem.xyz nwacna.xyz nuttrn.xyz nzgjlb.xyz nusped.xyz ntybev.xyz nzongo.xyz ntscon.xyz nurfcu.xyz ntime3.xyz ntojit.xyz nwital.xyz nuprfc.xyz nzcoin.xyz nuearn.xyz nwomfc.xyz nwoco9.xyz nvaeit.xyz nufblog.xyz nttcoin.xyz nwaymob.xyz nweqart.xyz nxhoroz.xyz nwcf-sc.xyz ntundex.xyz nuamsce.xyz nvpsinc.xyz nzzcoin.xyz nvlcoin.xyz nwwcoin.xyz nvwcoin.xyz nvycoin.xyz nua-nyc.xyz nwaindo.xyz nwww315.xyz nwzhang.xyz ntyccia.xyz nvvcoin.xyz nzvcoin.xyz nwineho.xyz nuucoin.xyz nyycoin.xyz ntin360.xyz nyvcoin.xyz nupacka.xyz nyoufei.xyz nuucnwt.xyz nzegive.xyz ntoeros.xyz nzummtz.xyz nusafic.xyz nz-shop.xyz nzipapi.xyz ntok-do.xyz nzgzyff.xyz nusrbma.xyz nzewoca.xyz nyoghoh.xyz nvdcoin.xyz nyjting.xyz nxvcoin.xyz nxxcoin.xyz nxpoint.xyz nvjcoin.xyz oyakusa.xyz ovhcoin.xyz ovgcoin.xyz ototoli.xyz oahoexp.xyz oaiausa.xyz oaim-me.xyz oaimore.xyz oairsex.xyz oamfine.xyz oamkhan.xyz oa-ness.xyz oapiemo.xyz oapkapk.xyz oargile.xyz oartfly.xyz oata-dc.xyz oatlclj.xyz oaubedu.xyz oaviluk.xyz oawapms.xyz oazurma.xyz obalkor.xyz obamica.xyz obauvin.xyz obbd100.xyz obc-edu.xyz obd2kcc.xyz obeatup.xyz obeeeer.xyz obellhz.xyz obesful.xyz obhdhrf.xyz obigbuy.xyz obigseo.xyz obikeit.xyz oblt111.xyz obocoin.xyz obsuedu.xyz oby-amr.xyz obycrom.xyz ocalkoy.xyz ocallad.xyz ocamgbc.xyz ocazatv.xyz occgpfl.xyz occotng.xyz ocetibs.xyz oceyder.xyz ochemax.xyz ochotab.xyz ociclac.xyz ocicore.xyz ocidhal.xyz ocineas.xyz ocingoz.xyz oclepsa.xyz ocnctaa.xyz ocolhor.xyz oconapo.xyz ocpanet.xyz ocpmpss.xyz ocrmcrm.xyz ocssara.xyz odclips.xyz odecraf.xyz odeebco.xyz oderais.xyz odownea.xyz odrewor.xyz odt-pbj.xyz oducknc.xyz odywity.xyz oe-beat.xyz oecgdev.xyz oeecoin.xyz oeithan.xyz oejbsen.xyz oembely.xyz oemimun.xyz oempaye.xyz oepay78.xyz oeponus.xyz oeros24.xyz oeufisc.xyz oeuhelp.xyz oexloan.xyz ofaayeh.xyz ofasl2k.xyz ofebapy.xyz oferfol.xyz offcoin.xyz ofinhda.xyz ofit360.xyz oflapps.xyz oforpaz.xyz ofredpl.xyz ofree2u.xyz ofremde.xyz ofubble.xyz pfunbaz.xyz pfutils.xyz pfxofkc.xyz pgade5d.xyz pgamnet.xyz pgarnex.xyz pgdjyjc.xyz pgeeses.xyz pgeobia.xyz pggcoin.xyz pgilvey.xyz pgo-edu.xyz pgoetec.xyz pgotoos.xyz pgoxdox.xyz pgrpcbi.xyz pguaala.xyz pguesto.xyz pguwdle.xyz phappy5.xyz pharbir.xyz phcarmy.xyz phelpnv.xyz phhcoin.xyz phiping.xyz phncsyc.xyz photinc.xyz phtbnow.xyz phughwu.xyz phuusle.xyz picdsde.xyz picetpr.xyz picoraj.xyz piicoin.xyz pilsccp.xyz pilumin.xyz pimokru.xyz pimpaes.xyz pincars.xyz pin-com.xyz pinexit.xyz pinogtc.xyz pipgmbd.xyz ewebadad.xyz etransio.xyz ew-i-l-l.xyz ewinatom.xyz eveganza.xyz etiwacpn.xyz ezhuyila.xyz etrackto.xyz ewjsqbyp.xyz ewmdexit.xyz ewolfard.xyz eyuiniks.xyz etrailex.xyz etlc0055.xyz ezentral.xyz ewvflood.xyz ezerovpc.xyz eyouthyx.xyz ezucknet.xyz eyogalay.xyz eyorpath.xyz ewestmen.xyz eyear501.xyz ettguide.xyz etourqld.xyz ewhoopee.xyz ezuribay.xyz etumlare.xyz ezakariye.xyz ezachteno.xyz evaragani.xyz etraps-ck.xyz evk-group.xyz eyavuzkoc.xyz etoppaths.xyz etiaoxuan.xyz etopangel.xyz evanphoto.xyz evetsexpo.xyz eyuanhuan.xyz evetjbsen.xyz exzuifire.xyz eunkilled.xyz evijranch.xyz eyesdaily.xyz euptownny.xyz euaetrade.xyz etzkuimai.xyz ezoojbsen.xyz ewanyantu.xyz etoursqld.xyz etilecoin.xyz ewholefit.xyz ewhatiseu.xyz eubertoys.xyz ewestwear.xyz etukalook.xyz etumjbsen.xyz ewbkuimai.xyz eturnship.xyz etrump100.xyz ewinvista.xyz etrevtech.xyz etricalyx.xyz etntutors.xyz ewuhanjob.xyz eworksurf.xyz ework4fun.xyz ewood1234.xyz evootcoin.xyz etrinsmun.xyz exenia34n.xyz ewisearts.xyz e24-hours.xyz e4dmovies.xyz e51yunxiu.xyz eaadaleel.xyz eaadimata.xyz eaarbinfo.xyz eaceevent.xyz eacsa-web.xyz eadvotips.xyz eaero-net.xyz eafrikemi.xyz eajai-adi.xyz ealbyrose.xyz ealeyayin.xyz ealiveinn.xyz ealjalili.xyz eal-rajaa.xyz ealvarion.xyz eanajbsen.xyz eandreroy.xyz eanejbsen.xyz eanticoal.xyz eappboard.xyz earchcoin.xyz earcjbsen.xyz earcturos.xyz earjtrust.xyz farkgenic.xyz farrowtek.xyz fartdzvin.xyz fartjbsen.xyz fartselko.xyz fashqixak.xyz fasschina.xyz fasso-pmm.xyz fastjbsen.xyz faxlacorp.xyz fazocraft.xyz fbabyrats.xyz fbaccgolf.xyz fbaladoni.xyz fbaraspot.xyz fbawangfu.xyz fbazarnew.xyz fbearhaus.xyz fbetrelax.xyz fbhozooka.xyz fbhrescue.xyz fbiojbsen.xyz fbitenvoy.xyz fbizguide.xyz fbkcanada.xyz fblackkey.xyz fblastair.xyz fbodisure.xyz fbotjbsen.xyz fbroadepc.xyz fbrtosert.xyz fbuzzking.xyz fcabledvr.xyz fcaketime.xyz fcampcook.xyz fcanabiol.xyz fcapmoves.xyz fcarbayon.xyz fcdeouccp.xyz fceramist.xyz fcgshader.xyz fchatados.xyz fchavetas.xyz fchurchhb.xyz fcinepool.xyz fcitybase.xyz fcivjbsen.xyz fcloud100.xyz fcloudvip.xyz fcoalfree.xyz fcodepost.xyz fcoinhunt.xyz fcoinlist.xyz fcolonita.xyz fcomathra.xyz fcomedien.xyz fcomjbsen.xyz fcomofarm.xyz fcookjazz.xyz fcraigsst.xyz fcreatana.xyz fcresting.xyz fcumshark.xyz fdaejinmp.xyz fdamwater.xyz fdarousam.xyz fdatquan9.xyz fdaylilys.xyz fdestress.xyz fdewatait.xyz fdggamble.xyz fdigidada.xyz fdispenda.xyz fdisrupto.xyz fdlkuimai.xyz fdocupool.xyz fdoerfair.xyz fdreamigo.xyz fdrtshirt.xyz fdvrfortv.xyz fdwmotors.xyz feartwork.xyz feastayde.xyz fecikorea.xyz fecojbsen.xyz feconauru.xyz fecoposto.xyz fecufiler.xyz feffwcape.xyz feinlicht.xyz felbutano.xyz felememed.xyz felemespa.xyz feliteseo.xyz felkinite.xyz femelozer.xyz feniskaya.xyz fentjbsen.xyz ferhancan.xyz fetiketto.xyz geuroprox.xyz gevoz-inc.xyz gewhughes.xyz geyejbsen.xyz gezebikes.xyz gezeepool.xyz gezzetech.xyz gfanlabel.xyz gfaturall.xyz gfedonemy.xyz gfenayusa.xyz gfil3arda.xyz gfindzapp.xyz gfirmware.xyz gfirstbuy.xyz gfirstseo.xyz gflashads.xyz gforewood.xyz gformaria.xyz gfree-crm.xyz gfreeways.xyz gfreibeet.xyz gfxrating.xyz gfxtgroup.xyz ggafuturs.xyz ggeneabel.xyz ggeojbsen.xyz ggetarmed.xyz ggetmovie.xyz ggetphone.xyz gggprabhu.xyz ggijugaku.xyz ggiracoin.xyz ggitamehr.xyz ggmcgroup.xyz ggostones.xyz ggraubner.xyz ggynjbsen.xyz ghaapuvut.xyz ghackerss.xyz ghandiway.xyz ghardin4h.xyz ghartweck.xyz ghauteats.xyz gheartfre.xyz ghervozer.xyz ghillegen.xyz ghipboard.xyz ghisjbsen.xyz ghistovid.xyz ghogricon.xyz ghoidenco.xyz gholesale.xyz ghopguild.xyz ghotidols.xyz ghougesen.xyz ghtmlcoin.xyz gicengine.xyz gicenrock.xyz giceradio.xyz gicesreps.xyz gictframe.xyz gideorama.xyz giece2016.xyz gimhorate.xyz gimmjbsen.xyz gimwealth.xyz gindycars.xyz gintjbsen.xyz giowacore.xyz gipadmini.xyz gishouhui.xyz