Fundamentals of foreign exchange market and terminologies used in dealings

[This post contains fundamental aspects of foreign exchange; forex markets;  as well as over 100  terminologies used in  forex dealings such as direct and indirect Quote;buying rate, selling rate,forward exchange rate, swap rate,spot rate,cross rate, transaction date,value date, Spread, premium, discount, points, arbitrage, Interest arbitrage,Interest parity, future, hedging, Loro account, Nostro Account,Vostro account, etc.] Foreign…

What is the meaning of ‘cooling period’ in collection of foreign currency cheques?

Foreign currency cheques A foreign currency cheque is one in which cheque amount is denominated in foreign currency like US Dollar, EURO, GBP, JPY etc. The personal -cheque, cashier cheque, travellers’ cheque, demand-draft etc. which are denominated in foreign currency are payable/ drawn on a bank outside India. Cash Letter Arrangement For collection of foreign…

SWIFT Financial messages: authentic and universal

The SWIFT financial messages are trusted as the most authentic and universal financial messages world over. SWIFT financial message is also the most convenient and fastest medium through which banks can meet customer’s requirement to send and receive message to and from any countries. Reasons for trusting SWIFT messages by banks and financial institutions: SWIFT stands…

What are the types of post-shipment finance available from banks?

(This post provides details about Purchase of export bills, Discount of Export Bills, Negotiation of Export bills, Advance against Undrawn Balances on Export Bills, Advance against Retention Money, Advance against Duty Draw Back, Advance against Deemed Exports, Advance against export of Goods for Exhibition and Sale) Post-shipment Export credit facility in banks means finance made to an exporter…

Buyers Credit and suppliers credit

Buyers’ credit finance means finance for payment of imports in India arranged by the importer (buyer) from a bank or financial institution outside India. The suppliers’ credit means credits extended for imports directly by the overseas supplier instead of a bank or financial institution.  Although both buyers credit and supplier credit are credit facility to the…