Nur Afni Latin

C1B014024
International Financial Management

International Financial Markets

Before learning more about International Financial Markets, we have to know what is the
meaning of International Financial Market ?. International Financial Markets is the place where
financial wealth is traded between individuals and between countries. It can be seen as a wide set
of rules and institutions where assets are traded between agents in surplus and agents in deficit
and where institutions lay down the rules.
The markets for real or financial assets are prevented from complete integration by
barriers such as tax differentials, tariffs, quotas, labor immobility, communication,
communication costs, cultural differences, and financial reporting differences. What is difference
between real assets and financial assets ?. Real assets is real tangible assets that can be seen,
touched, and used directly. The example is property, manufactur and inventories. While financial
assets is assets held as long-term savings that are used in the future, example stock and bonds.
But of the many obstacles posed can also create unique opportunities for specific geographic
markets to attract foreign investors.
Then, we will discuss about the reasons why investors, creditors and borrowers do their
acivities in foreign markets. Before leaning about it, we need to know what is the definition of
investors, creditors an borrowers. Investors are individuals or institutions either domestic or
non-domestic makes investments (form of investments in accordance with the type of
investments chosen) either in the short or long term. Sometimes the term "investor" is also used
to describe a person who makes a purchase of property, currencies, commodities, derivatives,
stock companies, or other assets with an aim to make a profit and not a profession, and only for a
short period only. Creditors are parties (individuals, organizations, companies or government)

who have a claim to the other party (the second party) on the property or services rendered
(usually in the form of a contract or agreement) which agreed that both parties would restore the
property of equal value or services. In short it can be said parties that provide credit or loans to
other parties. Borrowers is a person that has applied, met specific requirements, and received a
monetary loan from a lender.
Reasons why investors invest in foreign markets. First, to take advantage of favorable
economic condition, in here economic condition refer to the state of the economy in a country or
religion. Second, when they expect foreign currencies to appreciate against their own. Third, to
get the benefits of international diversification. Creditors provide credit in foreign markets : to
capitalize in higher foreign interest rates, when they expect foreign currencies to appreciate
against their own, to reap the benefits of international diversification. Borrowers borrow in
foreign markets : to capitalize in higher foreign interest rates, when they expect foreign
currencies to appreciate against their own. The foreign exchange market allow currencies to be
exchanged in order to facilitate international trade or financial transaction. The system for
establishing exchange rates has evolved overtime (from 1876 to 913, each currency was
convertible into gold at a specified rate, as dictated by the gold standard.) The market for
immediate exchange is known as the spot market. The forward market enables an MNC to lock
in the exchange rate at which it will buy or sell a certain quantity of currency on a specified
future date.
Banks provide foreign exchange services for a fee, the banks bid (buy) quote for a
foreign currency will be less than its ask (sell) quote. This is the bid/ask spread.
Bid /ask spread=

ask ratebid rate

ask rate

Berikut informasi nilai valuta asing dari beberapa bank :

1. BANK BNI

2. BANK MANDIRI

3. BANK BRI

4. BANK BTN

5. BANK BCA