Article1981

The Choice of Invoicing Currency in Merchandise Trade

86 citations0/0 files storedNational Institute Economic Review

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Global trade and economics Global Financial Crisis and Policies Risk Management in Financial Firms

Abstract

If an exporter or importer uses a foreign currency, his income or costs will be immediately affected when the exchange rate changes; if he uses his own, there will be no effect on contracts that are already fixed. Analysing the pattern of invoicing throws light on what objectives are important in firms' decisions, and in particular on their attitudes toward foreign exchange risk. At the aggregate level, their choice of currency influences the effect of an exchange rate change on a country's balance of trade.

Citations in this library

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References

1980Vehicle Currencies and the Structure of International Exchange 1979Vehicle Currencies And the Structure Of International Exchange 1974U.S. Import Prices in the Currency-Contract Period

Cited by

1992The Internationalization of Currencies: An Appraisal of the Japanese Yen 2016Trade invoicing in major currencies in the 1970s–1990s: Lessons for renminbi internationalization 2003Currency Invoicing in International Trade: an Empirical Investigation 1989Transactions Costs and Vehicle Currencies 1995Seasonalities and intraday return patterns in the foreign currency futures market 2012THE CHOICE OF AN INVOICING CURRENCY BY GLOBALLY OPERATING FIRMS: A FIRM‐LEVEL ANALYSIS OF JAPANESE EXPORTERS 1998Currency Choice in Industrial Pricing: A Cross-National Evaluation 2006Business cycles with staggered prices and international trade in intermediate inputs

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