International Business Chapter “6” Overview Presented by Jerry Miles.

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Presentation transcript:

International Business Chapter “6” Overview Presented by Jerry Miles

International Business Fluctuating Currency Values Foreign Exchange Quotations Exchange Rate Risk Currency Exchange Control Balance of Payments Tariffs, Customs or Import Duties Accounting Practices Debt

International Business Foreign Exchange quotations –use US$ –Forward Rates for Hard currencies –Premium vs. Discounted trades Spot Rate –Exchange between two currencies which must deliver within two days Forward Rate –30, 60, 90 or 180 days

International Business Government Controls –Limited Legal use of currency –Government sets value of currency regardless of market –Government must approve foreign currency purchases –Retains Currency within country

International Business Governments watch BOP as they go into deficit and take action to control deficit International Business Management Must always be awair of actions which may devalue currency or deflate economy Accounting Practices –Variation by country –Translation risk

International Business Debt –Our debt is in Government and Corporate Bonds –LDC debt used to meet Loan payments US debt is only 6% of GNP US foreign debt is in US$

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