Walmart is an American international grocery corporation headquartered in Bentonville, Arkansas.

It is
among the world's largest department stores. Sam Walton founded a corporation in 1962, and that it was
founded on October 31, 1969. Walmart owns and runs a series of supermarket chains, discount
department stores, and a convenience store. As Walmart opened two stores in Shanzen, China. These
stores are massive and sell both locally bought merchandise and imported goods. 70% of Walmart's
product are sourced from China. Walmart itself imported more than most countries can. Because of its
scale and purchasing power as a customer, Walmart has shifted the manufacturing and distribution
structure from Production Company to retail chain.
1 Use of spot market in foreign exchange
The spot market, also known as the cash market, is a publicly traded trading market where financial
instruments and services are exchanged for quick distribution. “It is a decentralized market with dealers
around the world continuously advertising prices at which they are willing to buy or sell a homogeneous
product” (Sapp, 2002). It differs from a futures market in that settlement is scheduled for a future stage.
Walmart is the world's biggest department chain, delivering both locally produced goods and goods
imported from the foreign market. Since this corporation buys and sells goods on a global scale, it would
make payments in foreign currency. They would import a large number of items, commodities, and
services from the international market, which necessitates the use of various currencies to finance for its
purchases. As a result, Walmart Inc. uses the spot market to swap international currency to charge for
their purchases directly. Likewise, Walmart's Chinese outlet must purchase a large number of items from
other countries, where it also must pay in foreign currency. As a result, in order to exchange the Yuan into
other currencies directly, China employs a spot market, which aids in the effective conduct of international
trade.
2 Utilizing international money market
As Walmart opens new outlets in other Asian countries, the retailer can have a variety of foreign
currencies on hand in order to validate and retain the business's success in Asian markets and other
global markets. Walmart can leverage through multinational or international banks as needed, well with
banks acting as a funding channel for Walmart stores on a quick basis using the forex market.
To extend the Walmart outlet in other international countries, Walmart must own or manage bonds with in
Euro currency market being used to fund the organization’s growth in those other international markets.
As the business Walmart requires funding in the international sector, they will collect the financing from
banks and financial institutions. The Euro exchange markets double as a savings and financing outlet for
global corporations such as Walmart. Whenever the bond is transacted in Eurocurrency, a portion of the
revenue earned when additional Walmart locations open can be used to fund the loan's interest. “A
money market fund is a type of mutual fund that is required by law to invest in short-term, low-risk
securities” (Hanson, Scharfstein, & Sunderam, 2015).
3 Using International Bond Market
Walmart must borrow long-term debt to spend in opening outlets in international nations in order to offer
the Eurobond. The bond market would enable Walmart to bring on instant debt within these regions,
growing currency within these nations' money markets. Following the conclusion of the establishment
process, Walmart could resume operations and gradually repay off the interest on its debt. They will lure
foreign buyers if they issue bonds from other nations. It will run its company at cheaper interest rates
even with lower borrowing costs. Exchange rates might not even be attractive at times, but they should be
weighed before entering into any foreign transactions and risking massive losses.
References
Hanson, S. G., Scharfstein, D. S., & Sunderam, A. (2015). An Evaluation of Money Market Fund Reform
Proposals. IMF Economic Review.
Sapp, S. G. (2002). Price leadership in the spot foreign exchange market. Journal of Financial and
Quantitative Analysis.
Madura, J. (2018). International Financial Management (13th edition ed.). Boston, USA: Cengage
Learning.