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Foreign trade financing letter of credit facility Bank provide foreign exchange for trade Investment on securities Portfolio investment
Changing Role of government Innovations in communication technology Increased volatility in intrest and foreign exchange rate
Free float system: A floating exchange rate or fluctuating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. A floating currency is contrasted with a fixed currency.
A fixed exchange-rate system (also known as pegged exchange rate system) is a currency system in which governments try to maintain their currency value constant against one another.
Managed Float
Managed float is the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries' exchange rates by buying and selling currencies. It is also known as a dirty float.
Balance Of Payment
Current account: The difference between a nation's total exports of goods, services and transfers, and its total imports of them. Current account balance calculations exclude transactions in financial assets and liabilities.
Capital Account
A capital account that shows the net change in asset ownership for a nation. The capital account is the net result of public and private international investments flowing in and out of a country.