A foreign exchange type of contract containing a provision to the effect that it can only be exercised on the expiry or maturity date. See currency option and American option.
Read MoreEvergreen letter of credit
A letter of credit that automatically renews itself beyond its stated expiration.
Read MoreExchange control
A government policy of regulating access to foreign currency. Typically, countries resort to exchange control because of chronic shortages of foreign currency, particularly the so-called hard (freely convertible) currency. The are several ways governments implement exchange control. Import licensing limits…
Read MoreExchange rate
The price of one currency expressed in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency. There are mainly two systems of exchange rates: Free exchange rates: the…
Read MoreExchange risk
The possibility of receiving less or paying more money because a receivable or a payable is denominated in a foreign currency. Countries with shortages of convertible currencies reserves often resort to exchange control. Under these conditions, delays in payments often…
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