From the course: Foundations of Business Banking
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Cross-border cash transactions
From the course: Foundations of Business Banking
Cross-border cash transactions
- Cross-border transactions present additional challenges for electronic funds transfers. For two years, I lived and worked in Kazakhstan. While I was there, I was paid in the local currency, the Kazakh Tenge. Because my home base of operations is the United States. And almost all of my financial dealings are in us dollars, I experienced significant currency risk associated with my Kazakh Tenge holdings. To manage that currency risk, each month, when I received my salary in Tenge, I immediately converted some of it into US dollars. So in Kazakhstan, I had two different bank accounts. One denominated in Kazakh Tenge to handle local Kazakh Tenge cash outflows, and another denominated in US dollars. Ah, but then there was the question of how to get those dollars from my bank in Kazakhstan, to my bank in the United States. I used the SWIFT system. SWIFT stands for, Society for Worldwide Interbank Financial Telecommunication…
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