Acurrency in the most specific use of the word refers to money in any form when in actual use or circulation,

as amedium of exchange, especially circulating paper money. This use is synonymous withbanknotes, or (sometimes) with banknotes pluscoins, meaning the physical tokens used formoneyby a government

oreign !urrency is thecurrency(i.e.money) of anothercountry. Aforeign currency accountis abankaccountin the currency of another country

a transaction that involves import-export operations relating to the exchange of goods, services, products of creative activity, and so forth, in which at least one of the parties is a foreign citizen or foreign juristic person. The basic types of foreign trade transactions are contracts of sale, work contracts, contracts of carriage, contracts of agency, and commissions. Monetary movements that take place due import and export transactions

"ost "#$s are heavily involved in international trade (exporting and importing), so it is important to know how it works and the risks involved.
The Trade !ycle
Exporter
Contract Land Transport

Importer
Port of Destination Land Transport and Delivery

Port of Departure Production

Sea Transport

Final Payment

Customs!

The Transaction over Time

%

Trade Relationships

The nature of the relationship between the exporter and the importer is critical to understanding the methods for import&export financing utili'ed in industry. There are three categories of relationships (see next exhibit)(
)naffiliated unknown )naffiliated known Affiliated (sometimes referred to as intra-firm trade)

The composition of global trade has changed dramatically over the past few decades, moving from transactions between unaffiliated parties to affiliated transactions.

Trade Relationships

Trade Dilemma

!on-trade transactions refer to all other foreign exchange transactions that are not import or export trade transactions. These include foreign inward and outward investments and foreign currency denominated loans and guarantees.