– lead and lag). When the expected sharp changes in exchange rates, the banks seek to manipulate the timing calculations: if the expected appreciation of the currency of payment, apply for early payment, and vice versa if you are going to depreciate, the payment delay. Such measures are used to pay for goods and services, transfer of profits, repayment of loans or interest payments, etc.
– Discounting of bills in foreign currency is a form of insurance of foreign trade, in which the bank assumes the risk of currency fluctuations, and the debtor's insolvency. Bill discounting is used in long-term transactions (for example, deliveries of investment goods).
There are other private forms of hedging: the formation of the bank and its customers of the insurance fund, inclusion in a trade or credit transaction so-called «multi-currency clause», implying the possibility of revising the currency of payment, consultancy services on part of the hedge, which the bank provides its customers, etc.
5. International settlements
5.1. The concept and means of international settlements
International operations – is the regulation of payments for monetary claims and liabilities arising from economic, political, scientific, technological and cultural relations between states, organizations and citizens of different countries.
Calculations carried out mainly by means of transfer in the form of entries in bank accounts. For this correspondent on the basis of agreements with foreign banks open correspondent accounts with banks «Loro» (through foreign banks in domestic credit institution) and «Nostro» (by the bank in a foreign bank).
Correspondent relations determine the order of payment, the fees, and methods of replenishment spent.
Since there is no global credit money taken in all the countries in the international accounts are used mottos – means of payment in foreign currency. Among them:
– Commercial bills of exchange (draft) – written orders for the payment of a sum certain person in a certain period, exhibited by exporters on foreign importers;
– Normal (ordinary) bills – debt obligations of importers.
– Bank bills – bills, bank exhibited this country to their foreign correspondents. Depending on the reputation of the banks' sphere of circulation of their bills is wider than commercial paper. Buying bank bills, importers exporters send them to repay their obligations.
– Bank Check – a written order to the bank to your bank – correspondent on the transfer of certain amount from its current account abroad to the check holder.
– Bank transfer – postal and telegraphic transfers abroad.
– Bank Cards – registered vouchers that entitle holders to use them to purchase goods and services on a cashless basis.
The system of international payment transactions using the so-called correspondent relationships with banks in other countries – the most common form of the transactions undertaken by commercial banks in the long-term philosophy[40].
Along with the national currencies of the leading countries used international currency unit – Euro and in a small amount of SDRs.
Gold, which is directly under the gold monometallic used as an international payment and means of purchase, in fiat credit money is used only as emergency money in the world of unforeseen circumstances. State if necessary resort to selling part of the official gold reserves of those currencies in which they expressed their international obligations. Thus, gold has been used for international payments indirectly through operations in the gold markets[41].
5.2. The mechanism of international settlements
Trade implies equivalence, so transfer the object of trade is always accompanied by what lawyers call consideration[42]. Foreign contracts provide for the transfer of goods, or documents that are forwarded by the bank of the exporter or importer's bank to the bank of the country – the payer to pay in a timely manner. The calculations are carried out by various means of payment used in international circulation: bills, checks, money orders, wire transfers.
When paying with foreign buyers interested exporter to export proceeds for goods and services as quickly as possible came to his account. It depends not only on the forms, but also on the types of calculations. Types of calculations used in the global foreign trade practices, are as follows:
– Payment in cash;
– Calculation of credit;
– Mixed (combined) calculations[43].
Schematically, the mechanism of international payments is as follows:
– The importer buys from a bank wire transfer, cashier's check, promissory note or other payment document and sends the exporter;
– Exporter receives payment from the importer, this paper and sells it to his bank for local currency, which it needs for production and other purposes;
– The exporter's bank sends abroad its correspondent bank payment document;
– From the sale of this document, amount of foreign currency is credited by the bank of the importer to exporter's bank's correspondent account.
This mechanism allows for international settlements through correspondent banks by offsetting counterclaims and obligations without the use of cash.
Banks tend to support the necessary foreign exchange positions in different currencies according to the structure and timing of payments, as well as carrying out monetary and financial conditions and payment of foreign trade transactions include the following elements:
– Exchange rates, the choice of which along with its level, the interest rate and currency exchange rate depends on the degree of efficiency of the transaction;
– The currency of payment, which must be repaid the obligation of the importer (or borrower); mismatch of currency rates and currency of payment – the simplest method of exchange risk insurance;
– Payment terms – an important element of foreign trade transactions. Among them are distinguished: cash payments, payments to a loan, a loan with an option (the right to choose) cash payment.
By cash international settlements are settlements in the period from the date of readiness of the exported goods to the transfer of documents of the importer.
Provision of credit has a definite influence on the conditions of international payments. If his calculations are carried out after the international transfer of goods in the ownership of the importer, exporter that lends it’s usually in the form of issuing a bill. If the importer pays for goods in advance, he credits the exporter.
Loan with an option for cash payment, if the importer, exercise the right of deferral of payment for goods purchased, he is deprived of discounts offered by cash payment.
5.3. The main forms of international settlements
To link the opposing interests of counterparties in the international economic organizations and their payment relationship apply various forms of payment.
The choice of methods of payment depends on:
– Type of product;
– Availability of credit agreement;
– The solvency and reputation of counterparties for foreign economic transactions.
The contract specifies the conditions and methods of payment.
– The collection form of payment – the client's order to the bank on receipt of payment from the importer of goods and services and placement of these funds to the exporter's bank. Banks perform collection operations, using the instructions received from the exporter in accordance with the Uniform Rules for Collections.
– Letter of credit – an agreement on the obligation of the bank at the request of the customer to pay for the