International Business Management

(IBM 412)

Lecturer: Senior lecturer Mr. P.J. Jayathilaka

St. Name: K.K.J.R.Samarasekera
03/MS/072
4th year 1st semester

FACULTY OF MANAGEMENT STUDIES

DEPARTMENT OF BUSINESS MANAGEMENT
SABARAGAMUWA UNIVERSITY OF SRI LANKA
 Acknowledgement

CONTENT
I would like to give my

humble thanks to my lecturer

Mr. P.J. Jayathilake,

for giving this opportunity

and his guidance to complete

this assignment successfully.

International financial management
Global financial system

International institutions

Managing foreign exchange

How do central banks manage exchange rates?
Why exchange rates?

What determines the exchange rates?

Why exchange rates are important?

Direct foreign exchange

Market participants

Financial instruments

Main currencies used in foreign exchange:

Bills of exchange
Characteristics of Bills of exchange
Forfeiting
How forfeiting Works in International Trade

Documentary Requirements

Letter of credit
Elements of a Letter of Credit
Factoring
International financial market
Market participants
Purpose of financial market
Direct foreign investment

Introduction
For four straight years the global financial system has shown impressive resilience. During the
past six months in particular, markets have not been easy to intimidate. Global imbalances have
widened oil prices have raised strongly, hurricanes have struck, and turmoil has developed in
U.S. credit derivative markets. Political uncertainty has increased in some emerging economies.

Solid economic growth, combined with low inflation, low bond yields, and cheap credits, has
bolstered current financial stability. These are all essential factors that customarily sustain
international financial markets and have done so through this cycle.

Global financial system is facing a recession since last year. Developed countries like USA, UK,
and Singapore are the most affected countries from this situation. Not only develop countries but
also developing countries also has affected this indifferent manner. This is negative effect of
globalization and international trade. Increase of oil prices, bankrupt of banks, higher inflation,
unemployment and other negative effects has reduce countries growth rates.

International trade and global financial system has become more complex and WTO, IMF, and