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Consider U.S. importer desiring to purchase merchandise from Dutch Exporter invoiced in euros, at a cost of 750,000. U.S. Importer will contact his U.S. Bank
Consider U.S. importer desiring to purchase merchandise from Dutch Exporter invoiced in euros, at a cost of 750,000. U.S. Importer will contact his U.S. Bank and inquire about $/ exchange rate. Say U.S. Bank offers a price of $1.3092/1.00. If U.S. Importer accepts the price, how this transaction will be completed? Assume EZ bank is U.S. banks correspondent bank in euro zone. Hint: use your knowledge about the correspondent banking relationship.
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