International Financial Management

PRESENTATION OF INTERNATIONAL FINANCIAL MANAGEMENT Presented By : ASHISH KATHIRIYA

GOHIL

Guided By: PRADIP H.

VISION INTERNATIONAL INSTITUTE OF MANAGEMENT

CONTENT MEANING CURRENCY EXCHANGE RATE FACTOR INFLUENCE EXCHANGE RATE FOREIGN EXCHANGE TRANSACTION OF COMMERCIAL BANK OF INDIA

CONTENT MAJOR ACTIVITY FINANCING FOREIGN TRADE EXPORT FINANCE REGULATION RELATING TO EXPORT FINANCE EURO ISSUED BY INDIAN COMPANY

CONTENT INTERNATIONAL BOND,EURO & GLOBLE FOREIGN DIRECT INVESTMENT SOURCE FOR TRADE FINANCE INTERNATIONAL ACCOUNTING CONCLUSION BIBLIOGRAPHY

MEANING OF INTERNATIONAL BUSINESS “International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals and organizations.”

CURRENCY

Country USA Kuwait Saudi Arabia Australia Pakistan Iran Japan China

Currenc y Dollar Dinar Riyal A Dollar P Rupee Rial Yen Yuan

Country Russia Spain

Currency Ruble S Peseta

France Mexico Oman UAE UK Italy

Franc (Euro) M Peso O Rial Dirham Pound Lira (Euro)

THE EXCHANGE RATE IS THE PRICE OF ONE CURRENCY IN TERMS OF ANOTHER

FACTOR INFLUENCING EXCHANGE RATE • Supply of and Demand for each Currency • Interest rate • Balance of payment • Government policy • Labour Market Flexibility • Capital Mobility

FOREIGN EXCHANGE TRANSACTIONS OF COMMERCIAL BANK OF INDIA • Nostro Account • Vostro Account

The Foreign Exchange Market • The FX market encompasses: – Conversion of purchasing power from one currency to another; bank deposits of foreign currency; credit denominated in foreign currency; foreign trade financing; trading in foreign currency options & futures, and currency swaps

• No central market place – World-wide linkage of bank currency traders, non-bank dealers (IBanks, insurance companies, etc.), and FX brokers—like an international OTC

CONTINUE… • Largest financial market in the world – Daily trading is estimated to be US$3.21 trillion – Trading occurs 24 hours a day – London is the largest FX trading center

Major Activity • Borrowing or lending

• Futures contract

• Balance of Trade

• Interest rate swap

• Forward contract

• Currency swap

FINANCING FOREIGN TRADE

EXPORT FINANCE 2.Funds should be available to the exporter at the require time 4.Cost of the fund should be affordable

REGULATION RELATING TO EXPORT FINANCE • RBI Guideline exchange Control regulation – FEMA1999 • Trade Control Regulation (Foreign Trade Policy 2004-2009) • International Chamber of Commerce (ICC)

EURO ISSUED BY INDIAN COMPANY • Permission for issue • Pricing of GDRs (Global Depository Receipt) • Issue of Foreign Currency Convertible Bonds

INTERNATIONAL BOND,FOREIGN,EURO & GLOBLE • Active Bond markets available to domestic & Foreign investors • Euro Bond • Global Bond (Introduce by World Bank in 1989)

FOREIGN DIRECT INVESTMENT (FDI)  Investment made to acquire lasting interest in enterprises operating outside of the economic of the investor  FDI in the World economy  Indian to allow FDI in Food Retail

SOURCES OF TRADE FINANCE

 Government Assistance Programs  Eximbank in United States– Arranges loans, guarantees, working capital and insurance  Foreign Corporation Insurance Agency – Protects against default on exports sold under open accounts

CONTINUE…..  Overseas Private Insurance Corporation – Offers performance bonds  Small Business Administration – Revolving line of credit

$

RESOURC E PROVIDE RS

RESOURC E USERS

BUSINESS ENTERPRISES

PROVIDERS OF CAPITAL (INVESTORS,CREDITORS,A ND GOVERNMENT)

INFORMATION PROVIDERS

INFORMATIO N USERS

FINANCIAL ACCOUNTING INFORMATION

ACCOUNTING IN THE INTERNATIONAL BUSINESS • Country differences in Accounting Standard • Inflation Accounting • International Standard International Accounting Standard Bond Financial Accounting Standard Bond Accounting Aspect of central system

CONTENT MEANING CURRENCY EXCHANGE RATE FACTOR INFLUENCE EXCHANGE RATE FOREIGN EXCHANGE TRANSACTION OF COMMERCIAL BANK OF INDIA

CONTENT MAJOR ACTIVITY FINANCING FOREIGN TRADE EXPORT FINANCE REGULATION RELATING TO EXPORT FINANCE EURO ISSUED BY INDIAN COMPANY

CONTENT INTERNATIONAL BOND,EURO & GLOBLE FOREIGN DIRECT INVESTMENT SOURCE FOR TRADE FINANCE INTERNATIONAL ACCOUNTING CONCLUSION BIBLIOGRAPHY

CONCLUSION Funds require to every company and also they need to support of Government, Banks etc. Accounting is must in all business transaction in international business and also they need to watch on currency swapping.

BIBLIOGRAPHY • INTERNATIONAL FINANCIAL MARKETS AND INDIA BY : H.R. Machiraju • INTERNATE • INTERNATIONAL BUSINESS BY : Charles W.L. Hill Arun K. Jain • EXIM FINANCE BY : K.Parmeswaram