Final answer:
The 'Eurocurrency' is currency banked outside its country of origin, which is an important low-cost source of funds for international businesses, allowing banks to borrow and lend in major foreign currencies.
Step-by-step explanation:
The term you're looking for to fill in the blank is 'Eurocurrency', which is any currency banked outside its country of origin. It serves as an important and low-cost source of funds for international businesses. For example, when a foreign firm sells goods in the United States and earns U.S. dollars, it may deposit these earnings in a bank outside the United States. Similarly, when U.S. tourists spend abroad, the foreign currencies they exchange can contribute to the Eurocurrency market.
The Eurocurrency market allows banks in countries with different domestic currencies to borrow and lend in major international currencies like the U.S. dollar, Euro, or Yen. This can be financially beneficial but can also expose the banks to exchange rate risk, especially if they borrow in one currency and lend in another. The process involves a bank in a non-dollar country borrowing dollars, converting them to the local currency for lending, and then converting the repayments back into dollars to repay the original loan.