Sources: CFO Magazine, 2001 Working Capital Survey; and CFO Europe Magazine, 2001 Working Capital Survey, July/Aug. 2001.

Foreign-exchange constraints Foreign-exchange constraints are an important limiting factor on fund flows from one country to another. International fund flows involve foreign-exchange transaction costs and exchange rate fluctuations.

Regulatory constraints Regulatory constraints can block dividend repatriation or other forms of fund remittances. This blockage occurs because of restrictions on the international movement of funds and other exchange controls.

Tax constraints Tax constraints limit the free flow of affiliate funds to a parent or to sister affiliates. These may occur because higher taxes on all corporate earnings or extra taxes on dividends may be imposed to curb inflation.

A summary of constraints Other economic factors, such as inflation and interest rates, also have an important impact on the international mobility of corporate funds.

There are many elements and issues in international current asset management. Here, we assume that the major tasks of current asset management consist of (1) the ability to transfer funds, (2) the positioning of funds within a multinational firm, (3) arbitrage opportunities, and (4) different channels to move funds.

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Basics Of Forex

Basics Of Forex

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