Foreign Trade

Foreign Trade-Meaning
Balance of Trade
Balance of Payments-Meaning-Accounting
Foreign Contracts
International Trade Agreement/Institutions
Methods of Foreign Trade
Banking Facilities
Role !"#ecti$es of %&im Bank
Free Port/Free Trade 'one
!ff-(hore Banking !)erations
%uro)ean Currency *nit
Foreign Trade
Trade Finance
Chapter 01
Introduction and Meaning
The foreign trade of a country refers to its im)ort
and e&)ort of merchandise from and to other
countries under contract of sale+ ,o country in -orld
)roduces all the commodities itre.uires+ The
commodities -hich country )roduces in
sur)lus/ it e&)orts/ -hile those
)roducing in deficit/ it im)orts+ In short/ foreign trade
refers to %&change of goods and ser$ices "et-een
t-o or more different countries+ (uch trade is also
kno-n as
International Trade+
Foreign Trade
Trade Finance
Chapter 01
Features and Types
Foreign Trade is ha$ing follo-ing features+
In$ol$ement of different monitory units+
Im)osition of restrictions in im)ort and e&)ort+
"y $arious countries+
Im)osition of restrictions on release of foreign
currencies e&istence of multi)le regulation+
Foreign Trade is of 0 ty)e1-
a2 Im)ort
"2 %&)ort
Foreign Trade
Trade Finance
Chapter 01
Features and Types
If the seller is a"road and the "uyer is in the home
country/ e&change of goods "et-een them is called
Im)ort+
If the seller is in home country and the )urchaser is
a"road/ the Trade "et-een them is called %&)ort+ A
foreign trade can "e further classified in to t-o according
to $isi"ility+
a2 3isi"le "2 In$isi"le+
A trade -hich can seen i+e+ e&change of goods/
merchandise is a $isi"le trade+ 4here as/ e&change of
ser$ices "et-een the )urchaser and seller is in$isi"le
trade i+e+ technical kno--ho-/ insurance etc+
Foreign Trade
Trade Finance
Chapter 01
Dumping
4hen goods are sold in foreign market -ithout
contract of sale it is kno-n as dum)ing+ The dum)ing
has follo-ing ty)es+
52 ()oradic 02 Predatory 62 Persistent 72 Re$erse
dum)ing+
4hen manufacturer -ants to dis)ose of goods in
foreign market at lo- )rice/ -ithout harming its normal
market/ the dum)ing is s)oradic+
To gain access in foreign market "y selling goods at
loss and to dri$e out the com)etitors refers to )redatory
dum)ing+
4hen a )roducer consistently sells at a lo-er )rice in
one market than in another/ it is called )ersistent dum)ing+
4hen manufacturer sells goods a"road at a higher
)rice than at home/ the )ractice follo-ed is called
re$erse dum)ing+
Foreign Trade
Trade Finance
Chapter 01
Balance of Trade
Balance of trade refers to as the difference "et-een
a country8s im)ort of merchandise and its e&)orts thereof+
This is also called the net difference "et-een the $alue of
commodities im)orted and e&)orted+ Balance of trade
may "e )ositi$e/ sur)lus or negati$e deficit de)ending on
situation of net )osition+
The )ositi$e/ sur)lus )osition occur -hen e&)ort
e&ceeds im)ort and -hen im)ort e&ceeds e&)ort the
"alance of trade is said to "e deficit or negati$e+
Foreign Trade
Trade Finance
Chapter 01
Causes of Reduction/Enhancement in
Balance of Trade
There are t-o main factors for $ariation in "alance of trade
)osition+
a2 %&ternal Factors+ "2 Internal Factors
a2%&ternal Factors1
9 The sudden rise in )rice of essential commodities like edi"le
oil/ drugs/ medical e.ui)ments+ %tc+
9 Position of -orld
9 4ide inflation or recession+
9 Trade restrictions im)osed "y the de$elo)ed countries
"2 Internal Factors1
9 :omestic shortage of industrial and agricultural )roducts+
9 A"sence of high technology+
9 Inade.uate kno-ledge of e&)ort market+
9 ,eglect of e&)ort )rofita"ility+
Foreign Trade
Trade Finance
Chapter 01
Corrective Measures
To come out of unfa$ora"le trade )osition/
follo-ing correcti$e measures are re.uired;
9 %&)ort Promotion1 By kee)ing .uality )rice
com)etiti$e
9 Im)ort Restriction1 By im)osing hea$y ta& duty in
im)ort
9 Finance1 By "orro-ings o$erseas+
9 Monitory Measures1 By )utting restriction on
"ank8s credit+
9 Fiscal Measures1 By curtailing )u"lic e&)enditure
9 :e$aluation1 By de$aluating country8s official rate of
e&change
Foreign Trade
Trade Finance
Chapter 01
Balance of Payment! Meaning" #ccounting
The "alance of )ayment of a country refers to/ a systematic
record of all trade transactions/ $isi"le and in$isi"le im)orts and
e&)orts during a gi$en )eriod+ The "alance of )ayment is a
difference "et-een international transfer of funds for a country8s
im)orts and e&)orts of goods and ser$ices for certain )eriod+
The accounting of "alance of )ayment has t-o ty)es
$i<+ current account and ca)ital account+
According to sec+ 0=>2 F%MA Act/ 5??? Current Account
includes )ri$ate and go$ernment merchandise/ in$isi"le items like/
Foreign trade/ (er$ices/ (hort term "anking/ etc+
4hile the ca)ital account transactions includes )ri$ate long
and short-term assets/ "anking transactions and official loans/
amorti<ation/ IMF and reser$es and monetary gold contingent
lia"ilities @sec+ 0=e2A
Foreign Trade
Trade Finance
Chapter 01
Balance of Payment
The study of "alance of )ayment can "e
summari<ed as "elo-1
Definition1 The "alance of )ayment of a country is a
systematic record of all transactions "et-een residents of
that country and the residents of foreign countries during
gi$en )eriod of time+
Contents1 It includes/ Merchandise/ $isi"le and in$isi"le
trade/ %rrors and !mission to strike a "alance "et-een
t-o sides of accounts+
Use1 The most im)ortant use is/ it is guide for
Bo$ernment in framing it8s monetary/ fiscal/ e&change
and other )olicies+
Foreign Trade
Trade Finance
Chapter 01
Balance of Payment
Broad :i$ision1 It is "roadly di$ided into
9 Balance of )ayments on current account and
9 Balance of )ayments on ca)ital account
Balances -ithin the total1 For the )ur)ose of analysis the
items are di$ided into fi$e;
a2 Trade Balance "2 Current Account Balance
c2 Basic Balance d2 ,et Ci.uidity Balance
e2 !fficial transaction Balance+
Foreign Trade
Trade Finance
Chapter 01
Dise$uili%rium
In "alance of )ayments/ de"it and credit items
seldom "alance+ As a result/ the "alance of )ayment is
either in sur)lus or in deficit+ 4hen a country ha))ens to
ha$e a sur)lus "alance in "alance of )ayment o$er the
years/ inflo-s of foreign ca)ital take )lace/ for that the
rates of interest are high and also there is
confidence in the country8s currency+ The
confidence in country8s currency refers to no
de$aluation of that country8s currency is
a))rehended+ 4hen/ on the other hand/ a
country has a deficit or unfa$ora"le "alance of
)ayment
its foreign e&change resources get de)leted+
Foreign Trade
Trade Finance
Chapter 01
Correcting the Deficit
As said earlier/ if country has an )resident
deficit/ follo-ing correcti$e measures are to "e
taken "y it8s Bo$ernment
9Im)ort Curtail 1 4hen im)orts are restricted/ the
)osition im)ro$es+ But it has to "e
used -isely+
9%&)ort Promotion 1By -ay of )acking credit facility/
e&)ort "ill )urchase/ insurance co$er
etc+
9Monetary Measures 1By raising the =(CR2 (tatutory
Ci.uidity Ratio / or "y o)en
market o)erations "y the Central
Bank+
Foreign Trade
Trade Finance
Chapter 01
Correcting the Deficit
9Fiscal Measures 1 These relate to a go$ernment8s
re$enue and e&)enditure and include
"udgeting for a sur)lus+
9:e$aluation 1 This refers to a reduction "y the
go$ernment in the country8s official
rate of e&change "et-een it8s o-n
currency and other currencies+
Foreign Trade
Trade Finance
Chapter 01
Foreign Contracts
Boods are traded "et-een t-o countries under contracts of
sale / )urchase -hich contains )rice/ mode of deli$ery etc+ The
foreign contracts can "e studied "y follo-ing )oints 1
9Mode of Delivery 1 The deli$ery may "e actual or constructi$e+ As
the name suggest/ actual deli$ery mean )hysical deli$ery of
goods to "uyer+ In constructi$ety)e not the )hysical "ut the
documents are handed o$er to the "uyer+ In foreign trade the
deli$ery is al-ays constructi$e+
9Mode of Payment 1 Follo-ing are different ty)es of )ayments 1
a2 !: / :P 1 Payment on :emand/Payment against :ocuments+
"2 :A 1 :ocuments deli$ered after Acce)tance through Bill of
%&change+
c2 3P / Co: 1 3alue Paya"le/ Cash on :eli$ery "oth these terms
related to )ost )arcel deli$ery+
Foreign Trade
Trade Finance
Chapter 01
Foreign Contracts
Freight and Insurance 1 In foreign trade in case
of freight and insurance certain a""re$iations are used as1
5+ c+i+f+ 1 Refers to the amount of insurance/ freight are
included in in$oice or contract of sale / )urchase+
0+ c+ f+ 1 (tands for cost and freight/ mean that -hen
goods shi))ed under c+i+f+ contract/ freight should "e
)re)aid+
6+ f+o+"+ 1 These letter stands for free on "oard+ In
this "uyer names the $essel and
s)ecifies the date of deli$ery+
7+ f+a+s+ 1 This means free alongside shi) and im)ly that
seller is res)onsi"le for the deli$ery of goods -ithin
s)ecific time+
Foreign Trade
Trade Finance
Chapter 01
International Trade Institutions
Follo-ing chart re)resents some of the International Trade
Institutions / Agreements 1
Cet8s look each of a"o$e in "rief+
EEC
&'#'T'T'
()CT#D
International
Trade
#greements
#C(
*PEC
Petro Dollars
Foreign Trade
Trade Finance
Chapter 01
&'#'T'T'
B+A+T+T+ is the a""re$iation of the Beneral
Agreement on Tariff and Trade/ -hich -as signed at
Bene$a "y 06 countries in 5?7D/ effecti$e >anuary 5?7E+
It is a -orld organi<ation designed to "ring a"out
ma&imum )ossi"lerate of gro-th in -orld trade "y
reducing tariff "arriers among mem"ers countries+ It
"elie$es in negotiation and throughout it/ BATT -orks
for reduction of "arriers of trade+ In 5?FD/ the negotiation
round called/ Gennedy Round -as the "iggest e$er tariff
cutting deed+ In (e)tem"er 5?EF/ ministers of 5HH
countries got together in *ruguay and "egan E
th
round of
negotiation+
Foreign Trade
Trade Finance
Chapter 01
&'#'T'T'
The round of talks concluded on 5I
th
:ecem"er/
5??6+ The concerned matters are 1
9Reducing s)ecific trade "arriers and im)ro$ing market
access+
9(trengthening B+A+T+T+ disci)lines+
9Trade Related Intellectual Pro)erty Rights =TRIPs2+
9Trade Related In$estment Measures =TRIMs2+
9Trade in (er$ice+
Mr+ Arthur :unkel/ former :irector Beneral of
B+A+T+T+ su"mitted com)rehensi$e document -hich is
commonly kno-n as/ :unkal Pro)osal on :ecem"er 0H
th
5??5+ India signed this Pact on 5I/7/5??7 along -ith 507
other countries+
Foreign Trade
Trade Finance
Chapter 01
EEC and ()CT#D
The European Economic Community (EEC) : The
%uro)ean community also referred as the %uro)ean Common
Market =%CM2 come into "eing -ith Treaty of Rome in 5?ID/
"y si& countries $i<+ France/ Bermany/ Italy/ Belgium/
Jolland and Cu&em"ourg+ The treaty )ro$ides free mo$ement
of goods/ ser$ice and ca)ital amongst mem"er countries+
United Nations Conference on Trade and development
(UNCTAD) :This is a forum of the *nited ,ations
!rgani<ation/ aiming at international economic co-o)eration
in the areas of trade and aid+ The *,CTA: is held e$ery four
years to seek -ays to end dis)arities "et-een the rich and
)oor nations+ There ha$e "een so far four conferences+ (o for/
the success of such meetings in achie$ing its o"#ecti$es has
"een $ery limited+
Foreign Trade
Trade Finance
Chapter 01
*PEC + Petro Dollars
r!ani"ation of Petroleum E#port Countries (PEC)
: The organi<ation/ -hich consist of Ira./ Iran/ (audi
Ara"ia/ *AR/ Gu-ait/ Ci"ya/ ,igeria etc+ aims at
)rotecting the interest of the mem"er countries "y
controlling the )rices of )etrol and )etroleum )roducts+
Petro Dollars :The accumulation of currencies at the
dis)osal of the oil e&)orting countries of 4estern Asia
and other )laces/ ha$e "een in$ested "y the o-ner
countries -ith American "anks and / or inshares in
multinational concerns in the *+(+A+ (uch de)osits in
dollars in the *+(+A+ are referred to as oil or )etro dollars+
Foreign Trade
Trade Finance
Chapter 01
#sian Clearing (nion
Asian Clearin! Union (ACU) : It -as esta"lished on ?
th
:ecem"er 5?7D "y Reser$e Bank of India/ the Bangladesh
Bank/ the Bank Marka<i of Iran/ the ,e)al Rastra Bank/ the (tate
Bank of Pakistan and the Central "ank of (ri
Canka as the founder mem"ers+ In A)ril
5?DD/ the union of Burma Bank #oined the *nion+
It8s head.uarters are at Teheran/ Iran and its o)erations are
conducted "y Board of :irectors and a manager+ The o"#ecti$es of
this union are/
9To facilitate )ayments for current international transactions -ithin
the %(CAP region+
9To reduce / eliminate use of e&tra regional currencies to settle
transactions "y )romoting the use of the )artici)ants currencies+
9To contri"ute to the e&)ansion of trade and )romotion of monetary
coo)eration among the countries of the area+
Foreign Trade
Trade Finance
Chapter 01
#C( and India
(ince 5?E7/ all eligi"le )ayments "et-een India
and other mem"er countries e&ce)t/ ,e)al/ to "e settled
through the AC*+ The )ayments e&cluded are as "elo- 1
9Tra$el
9Contracts made from an International Financial
Institution like -orld "ank+
9:eferred )ayments facilities e&tended "y one mem"er
country to another mem"er country+
Payments "et-een India and ,e)al are not eligi"le to "e
settled through AC*+
Foreign Trade
Trade Finance
Chapter 01
Benefits of #C(
The ad$antages of AC* can "e summari<ed as "elo- 1
A))recia"le sa$ings of the li.uid foreign
e&change reser$es+
Reduction of the -orking "alances in the foreign
e&change+
(a$ing in the cost of settlement+
Curtailment of the time needed "efore for
settlement of transactions "y the elimination of
the intermediary corres)ondents in Condon or
,e- Kork+
Foreign Trade
Trade Finance
Chapter 01
Euro Money
It is a monetary system of ele$en %uro)ean
countries/ -hich started it8s functioning since >anuary
5???+ This is third strong currency after dollar =*+(+2+
This is the money against -hich there is neither gold
"anking nor any natural go$ernment+ (ome of the
countries -ho8s #oint efforts make this are/ Italy/
Bermany/ Belgium/ Finland/ Ireland etc+ !ther I
mentioned nations not yet #oined the %uro due to
economic and )olitical reasons are Breat Britain/
:enmark/ %gy)t/ (-eden and France+
Foreign Trade
Trade Finance
Chapter 01
Conditions for Euro Money #greement
Follo-ing are some of the conditions for this
agreement 1
The countries ha$e to kee) their Budget deficit/
"elo- 6L of B+:+P+ i+e+ Bross :omestic Product+
Countries should ha$e go$ernment de"ts "elo-
FHL of B:P+
Inflation should not e&ceed 5+IL+
Rate of interest should not "e more than 0L+
Foreign Trade
Trade Finance
Chapter 01
Foreign Trade Methods
Boods may "e traded or e&changed "et-een
e&)orter and im)orter in any of the three -ays 1
a)n pen Account $asis : 4here the credit
status of im)orter is high/ the goods are
sent direct to him in antici)ation of
)ayment in due course+ %&)ort on this
"asis is not )ermissi"le in India+
%)Under $ill of E#chan!e 1 The e&)orter may dra- "ills
of e&change on the im)orter for the $alue of the
e&)orts and collect the "ills through "ank+
c)Under &etter of credit 1 The e&)orter may agree to
e&)ort the goods only against a letter of credit o)ened in
his fa$our+
Foreign Trade
Trade Finance
Chapter 01
Ban,ing Facilities
Banks can render assistance to Indian merchants
and manufacturers already engaged in or intending to
enter in foreign markets in follo-ing -ays 1
9 Bank can )ro$ide credit -orthiness and status re)orts+
9 Bank can assist to Indian e&)orter -ho -ish to go
a"road for e&)ort )romotion/ "usiness tour etc+
9 Bankers can/ -hen re.uired )ro$ide the name/ address
of foreign firms -hich may "e interested in #oint
$entures in India+
9 For im)orters "ank can collect im)ort "ills dra-n on
them and arrange remittance+
9 For e&)orters "ank may render agency ser$ice+
9 Bankers also )ro$ide to im)orters and e&)orters
information a"out e&change control regulation/ im)ort
license )rocedures to "e follo-ed etc+
Foreign Trade
Trade Finance
Chapter 01
Role of E-im Ban,
%&im Bank is short form of %&)ort Im)ort "ank of
India+ It is a )u"lic sector "ank esta"lished on >anuary 5
st
5?E0 -ith authorised share ca)ital of Rs+0HH crores+ The
main o"#ects of %&im Bank are 1
9Pro$ide financial assistance to e&)orters+
9Promoting foreign trade of India+
9Coordinating the -orking of institutions engaged in
financing e&)ort and im)ort+
9Assist Indian >oint 3entures in third -orld+
9Concentrate on medium and long term finance+
Foreign Trade
Trade Finance
Chapter 01
Functions of E-im Ban,
Follo-ing are some of the functions of %&im "ank 1
To )ro$ide financial assistance to e&)orters and
im)orters+
Branting loans and ad$ances in and outside India+
Refinancing usance e&)ort "ills of "anks+
Branting o"ligation/ #ointly -ith "anks on "ehalf of
)ro#ect e&)orters engaged in the e&ecution of
construction and turnkey contracts a"road+
To act as a )rinci)al financial institution for
coordinating the -orking of other institutions+
Foreign Trade
Trade Finance
Chapter 01
*%.ectives E-im Ban,
Follo-ing are some of the o"#ecti$es -hich ha$e
"een setu) "efore e&im "ank 1
Branting loans and ad$ances in India solely or #ointly
-ith commercial "anks+
Branting loans and ad$ances outside India+
Issuing "id-"onds and guarantees and other facilities
in India or a"road+
(elling or discounting of e&)ort "ills in the -orld
market+
Maintaining of foreign currency accounts+
Foreign Trade
Trade Finance
Chapter 01
*%.ectives E-im Ban,
*ndertaking and financing of research/ sur$eys etc+
Pro$iding technical/ administrati$e and financial
assistance+
Planning/ )romoting/ de$elo)ing and financing
e&)ort oriented "usiness/ industries+
Financing e&)ort of machinery and e.ui)ment on
lease "asis+
Branting loans and ad$ances to Indian #oint 3entures
a"road+
Foreign Trade
Trade Finance
Chapter 01
/upplier0s Credit
It is also called as seller8s credit/ under this/ funds
are )ro$ided on deferred )ayment terms to Indian
e&)orters of )lant/ e.ui)ment and related ser$ices+ This
)rogramme co$ers )ro#ect e&)ort/ -hich could "e turnkey
)ro#ect or construction )ro#ects+
The credit is )ro$ided "y %&im Bank in
)artici)ation -ith commercial "anks -here indi$idual
contract $alue is not more than Rs+6 crores+
The e&)orter is re.uired to su"mit the )ro#ected
.uarterly dra-al of entire credit amount -ell in
ad$ance of it8s utili<ation+ %CBC insures the
e&)orters and in many cases additionally
gi$es the guarantee to the negotiating "ank+
Foreign Trade
Trade Finance
Chapter 01
Buyer0s Credit
This credit is e&tended "y e&im "ank to "uyers
a"road to ena"le them to im)ort engineering goods and
)ro#ects from India on deferred credit terms+ This facility
is to "e secured "y a letter of credit or "ank guarantee or
)romissory note from go$ernment+
%&im Bank directly enter into an agreement -ith
the o$erseas "orro-er outline the terms and conditions of
the credit co$ering the e&)ort contract+
Foreign Trade
Trade Finance
Chapter 01
Facilities Provided %y E-im Ban,
Follo-ing are some of the facilities )ro$ided "y
%&im Banks+
Consultancy and Technology (er$ices+
!$erseas In$estment Financing Programme+
Pre-shi)ment Credit+
%&)ort !riented *nits+
Com)uter (oft-are %&)orts+
%&)ort Marketing Fund+
%&)ort Product :e$elo)ment+
Pro#ect Pre)aratory ser$ices+
Foreign Trade
Trade Finance
Chapter 01
Terms and Conditions
%&im Bank has "een o)erating a lending
)rogramme su"#ect to follo-ing terms and conditions 1
9 The assistance may "e direct or may "e refinance to a
commercial "ank+
9 Commercial "anks lending for )ro#ects costing u)
to
Rs+0 crores are eligi"le for refinance+
9 The assistance rendered is usa"le for ac.uisition of
fi&ed asset+
9 ,o credit authori<ation from RBI or any reference to
I:BI is necessary+
9 The rate of interest is currently ? L )+a+
9 The loan is re)aya"le in 5H years including
moratorium )eriod+
Foreign Trade
Trade Finance
Chapter 01
Free Port / Free Trade 1one
A free )ort is a )ort declared as such "y the
go$ernment of the country -here no .uantitati$e
restrictions on im)orts into or e&)orts+ A free )ort or a free
trade <one is also conducti$e to entre)ot trade i+e+
im)orts not for domestic consum)tion "ut for re e&)ort+
In India/ the idea of esta"lishing free )orts or free
trade <ones -as first mooted in 5?ID "y the %&)ort
Promotion Committee+ The o"#ect "ehind this -as
stimulation of e&)orts+
At the moment there are t-o free trade <ones in
India/ one at Gandla in Bu#rat and other at (anta Cru< in
Mum"ai+
The electronic %&)ort Processing 'one =%%P'2 at
(anta Cru</ Mum"ai has a"out 6H units set u) in its area
engaged in )roducing 5HHL e&)ort oriented electronic
e.ui)ment+
Foreign Trade
Trade Finance
Chapter 01
*ff!/hore Ban,ing
!ff-shore "ankingis altogether ne- system of "anking+
This system is o)erated through the off-shore "anking units of
o$erseas "anks in under de$elo)ed countries+ The funds of an off-
shore "anking units are em)loyed in financing ca)ital intensi$e
local )ro#ects or in turnkey )ro#ects undertaken "y e&)orters of the
host country+ The )rofit made out of such "anking o)erations may
"e re)atriated/ usually ta& free/ to the )arent "ank+
!ff-shore "aking units are at )resent o)erating at
Bahrain/ (inga)ore/ Jong Gong etc+ There are
0H centers in -orld+ The "enefits to host
country of such "anking are as "elo- 1
9Inflo- of interest free foreign ca)ital into the country+
9%&em)tion from minimum reser$e re.uirement+
9Cicense fees are generally lo-+
9Close )ro&imity to the im)ortant loan outlets or de)osit sources +
Foreign Trade
Trade Finance
Chapter 01
IB( International Finance 2td'
The first e$er international financial organi<ation
s)onsored "y a cor)oration of Indian nationali<ed "anks/
such as Indian/ Bank of Baroda and *nion Bank of India+
It -as esta"lished in Jong Gong and started
functioning in !cto"er 5?EH+ This is a
de)osit taking organi<ation -ith off-shore
and otheracti$ities+ The organi<ation is
eligi"le to acce)t de)osits of Jong Gong dollars
IH/HHH
and a"o$e+
Foreign Trade
Trade Finance
Chapter 01
EC(
%C* is a""re$iation of %uro)ean Currency *nit+ It
has "een recogni<ed as a foreign currency officially "y
Italy/ France/ Belgium and Cu&em"ourg and de facto
"y the *nited Gingdom/ %ire/ ,etherlands and
:enmark from >anuary 0HH0+ The %*C isa
currency "asket com)osed according to the
o)en "asket8 formula of the eight %M( currencies )lus
sterling and Breek drachma+
There is also an inter-"ank de)osit market in %C*
for %C* 5H "illion or mo$e for maturities u) to one year
or more+ The %C* is .uoted against *+(+ dollars and
cross rates are calculated against other currencies -ith
$ery narro- s)reads+
Foreign Trade
Trade Finance
Chapter 01
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