the process of international settlement
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The process of international settlement. A Nation`s National Bank B Nation`s National Bank A Nation`s Local Bank B Nation`s Local Bank A Nation`s Import Company B Nation`s Export company. The structure of foreign exchange market. Interbank market. - PowerPoint PPT PresentationTRANSCRIPT
The process of international settlement
A Nation`s National Bank B Nation`s National Bank
A Nation`s Local Bank B Nation`s Local Bank
A Nation`s Import Company B Nation`s Export company
The structure of foreign exchange market
Interbank marketCentral bank Broker
Bank
Firm, public, government, etc
Calculation of Spot rates
• Condition: GBP/USD 1.5800/10;
USD/EUR 0.9120/30;
USD/JPY 121.45/75
Problem 1: What is the buying rates between USD/EUR
0.9120
Problem 2: What is the selling rates between USD/JPY
121.75
Problem 3:A firm would have EUR against 100 million GDP, how much can the firm get
1.5800 * 0.9120 * 100M = 1.4410 *100M EUR.
Problem 4: how much can the firm get JPY against 100M EUR
121.45/0.9130 *100m = 133.13 * 100M EUO