International-Business-Dr-R-Chandran-E-book

6. Essentials of Trade Finance
81
International Business- Dr. R. Chandran
“Means and methods of transaction determine perfection.
No one can claim that his business is
successful until a complete receipt of money is ensured for his
business.
deal, through proper channel and right currency
Learning Value:
On going through this chapter the reader will learn certain essential
aspects of transaction either export or import or investment.
• Foreign exchange transaction.
• Exchange rate mechanism fro merchant trade.
• FEMA on international trades
• UCPDC and its essential provisions
• Safe and secured transaction through Letter of Credit.
Different countries have different currencies. All the
currencies are neither equivalent in value nor stable. Whether the
company is involved in trading or manufacturing or investing there is
a need for expertise in managing currencies at all the stages of
operation.
Exchange Rate is defined as the rate at which one currency is
exchanged for another currency.
Foreign Exchange trading is a sale or purchase of one currency and
traded with another.
In a foreign exchange transaction:
Only for Private Circulation