letter of credit
Aug 17 2018

Discounting charges on letter of credit

Discounting of Letter Of Credit (LC) is a short term credit to the seller by the bank. The letter of credit is opened by the buyer in favor of the supplier for the supply of goods. At the end of the LC period, the supplier is paid through the LC. The supplier has to discount

Aug 17 2018

GOLD – A SAFE HAVEN OR NOT

An investment which will retain or increase in value during market volatility is considered as a safe haven. Gold is considered as a safe haven investment for decades since investors are attracted towards gold during the times of market turmoil. Gold price is negatively correlated to US stock market performance. So, gold will be hedged

Jun 21 2018

What is Foreign Exchange and Foreign Exchange Market?

Foreign exchange refers to the exchange of one currency for some other currency. In a typical foreign exchange transaction, a party purchases some quantity of one currency by paying with some quantity of another currency. The foreign exchange market indicates a market in which the various participants are able to buy, sell, exchange and speculate

Jun 19 2018

What is Foreign Exchange Risk Exposure?

Foreign exchange risk or foreign exchange exposure refers to the financial risk associated with a transaction denominated in a currency alien to the base currency of the firm. It is also known as currency risk or the exchange rate risk which commonly arises in a case where a subsidiary of a multinational company maintains its

Jun 18 2018

Letter Of Credit

A letter of credit or LC in simple words refers to a written guarantee or commitment to pay, by a buyer’s (importer’s) bank, which is also known as the issuing bank to the exporter’s or seller’s bank, which is referred to as the negotiating or accepting bank. A letter of credit is also named as

Jun 13 2018

Supplier’s Credit vs Buyer’s Credit

Buyer’s credit is a short term based credit benefit that can be availed by a buyer (importer) from a foreign bank or financial institution (also known as funding bank) from importing goods from the seller in the foreign country (exporter). The overseas bank commonly known as the funding bank extends buyer’s credit based upon the