CHAPTER IV: INTERNATIONAL TRADE
AND FINANCIAL SERVICES
1. International Trade & Financial Support
2. Interest Rate, Exchange Rate and Payment
Time
1. International Trade & Financial Support
2. Interest Rate, Exchange Rate and Payment
Time
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B02013 - INTERNATIONAL TRADE
AND FINANCIAL SERVICES
1. International Trade & Financial Support
• Includes
– Goods and Services
– Financial Payments
• Risks
Delivery, Transport, Credit, Exchange Rate,
Payment Transfer…
• Includes
– Goods and Services
– Financial Payments
• Risks
Delivery, Transport, Credit, Exchange Rate,
Payment Transfer…
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AND FINANCIAL SERVICES
1.1 Methods of Payments
• There are 4 Payment and Sponsor Methods to
transfer risks between buyers and sellers
– Cash deposit Advance

• Used mostly in payment between associated
company or company with long-term relationship
• Goods and Services are delivered before
Payment is made
• There is no interfere of third party
• Seller bears Costs and Risks
• More Transparency
• Used mostly in payment between associated
company or company with long-term relationship
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1.1.3 Documentary Draft for Collection
• Seller entrusts the collection of a payment to the
remitting bank (Seller’s), which sends
documents to the a collecting bank (Buyer’s)
• Time of payment is given in the contract.
• D/C involves a draft requires the importer to pay
the face amount either at sight
(Documents against Payment – D/P) or on a
specific date (Documents against Acceptance –
D/A)
• Seller entrusts the collection of a payment to the
remitting bank (Seller’s), which sends
documents to the a collecting bank (Buyer’s)
• Time of payment is given in the contract.
• D/C involves a draft requires the importer to pay
the face amount either at sight
(Documents against Payment – D/P) or on a
specific date (Documents against Acceptance –

• Counter Trade
– Buy Back Agreement
– Compensation Agreement
– Counter Purchase Agreement
• Credit payment of Buyer
• Payment of Account Receivable
• Using Intermediate Commercial Trade
• Purchase Exporter’s Account Payable
• Buy and Sell Credit
• Counter Trade
– Buy Back Agreement
– Compensation Agreement
– Counter Purchase Agreement
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AND FINANCIAL SERVICES
2. Interest Rate, Exchange Rate and
Payment Time
• Adjusted Domestic currency to pay for export at t
time is
At t = 0, the above equal
• Adjusted Domestic currency to pay for export at t
time is
At t = 0, the above equal
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• Let is the domestic interest rate, without
calculating the interest amount
• Without delay payment is execute when