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International Finance (405-B)

Chapter 1 Overview of International Business


International business
Any type of Business activity that cross national borders. Need of International Business
Categories in International business - Foreign Trade - Trade in Services - Portfolio Investments - Direct Investments

Globalization It refers to a process of integration of the world into


one huge market Impact of Globalization -Configuring anywhere in the world -Inter-linked and Inter-dependent Economies -Lowering of trade and tariff barriers -Effect on related industries -Mobility of skilled resources -Market side Efficiency -Formation of regional blocks -Intra structural resources and inputs and international prices

Features of Globalization Drivers of Globalization

WTO(World Trade organization)


Is an international organization design by the founders to supervise and liberalize international trade.

Functions of WTO Organisation of WTO - Hierarchical conference


Ministerial conference General council Councils Committees and Management Bodies

World Bank(IBRD)
Is an inter governmental institutions ,corporate in form, the capital stock of which is entirely owned by its member government

Objectives of World Bank Role of World Bank


Advances loans Provide technical assistance Imparts Training Settlement of International disputes Provide Financial; Assistance Conduct economic research Establishing Subsidiary institutions

International monetary fund


IMF was created with a goal to stabilize exchange rates and assist the re-construction of the worlds international payment system

Functions of IMF
Short term credit Institutions Acts as a mediator Dispensation of Justice Technical Assistance Publication

Organization structure

SDR(Special Drawing rights)


Is the monetary unit of the reserve asset of the IMF

Role of SDR

International Finance
Def-IF is the branch of economics that studies the dynamics of exchange rates, foreign investments, and how these affect international trade

Nature and Scope of International Finance


Foreign exchange management Exchange rate determination Exchange rate risk and its managements MNC,s investment decisions International Working Capital Decisions Financing decisions of the MNC,s Inter accounting and taxation Inter indebtedness

Significance of International Finance

Use of IT in International Business


ITES(IT enabled services) KPO(Knowledge Process Outsourcing) E-Business enterprises

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