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International Finance: An Introduction. Dr Kishor Bhanushali. International Finance. Globalized world International economic order Flow of goods and services, labor, technology, money International character of finance
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International Finance: An Introduction Dr Kishor Bhanushali
International Finance • Globalized world • International economic order • Flow of goods and services, labor, technology, money • International character of finance • The management of financial resources in the context of international business is termed as international financial management • Separate discipline of international financial management • Rapid expansion and diversity in international transactions • Special skill to understand the international aspects of financial management
Global interdependence • Growth of international trade • Interdependence between countries • Development of Information and communication technology • Economic liberalization • Growth of MNCs • Sophistication in international monetary system • New financial instruments • Network of financial institutions • Integration of global market • IT services in India • GDR & ADR • Joint ventures and subsidiaries • FIIs and FDI • Global financial crisis 2008
International financial management • Raising capital needed for business at minimum possible costs • Estimating and formulating the financial structure of business • Utilizing the capital available to the firm in most effective manner • Maximizing the returns • Financial analysis, planning and control • Flow of fund across national boundaries • International finance • Difference between national finance and international finance • Foreign exchange and foreign exchange risks
Some concepts • Foreign exchange • Foreign exchange rates • Foreign exchange market • Currency derivatives : currency futures, currency options and currency swaps • Foreign exchange risk and its management: hedging • International investments: FDI & FIIs • International financial system • International monetary system: IMF, World Bank, ADB etc. • Balance of Payments