What are FOB value and CIF Value?

The export order received by an exporter from a foreign buyer may be on FOB terms, CIF firms, and CIP or CPT terms are among the most common of the 12 international commerce terms (incoterms) established by the International Chamber of Commerce (ICC) in 1936. These are international shipping agreements used in the transportation of…

What is capital account convertibility (CAC)?

Capital Account Convertibility means that the currency of a country can be converted into foreign exchange without any controls or restrictions. The Report of the Tarapore Committee on Capital Account Convertibility (1997) provided the following working definition of CAC: “freedom to convert local financial assets into foreign financial assets and vice versa at market determined…

What is a Balance of trade?

Balance of trade is just a smaller part of balance of payments. Balance of payments is a statement which summarizes the balance of trade, the balance of services, balance of unilateral transfers, and balance of payment on capital account.    The idea behind the balance of payment is to see whether export of goods of a…

What is Balance of Payments (BOP)?

The term balance of payments (BOP) imply that the balance of all financial exchanges between one country and another country of the rest of the world, made up of the current account (visible and invisible trade) and capital account (capital movement) and financial transfers excluding Central Bank’s reserve. If the inward supply of funds such…

What is Asian Clearing Union (ACU)?

Asian Clearing Union (ACU) was established in 1975, after at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The central banks and monetary authorities of India, Islamic Republic of Iran, Nepal, Pakistan and Sri Lanka Bangladesh, Myanmar, Bhutan and Maldives are the current participants in the ACU…