73.7k views
3 votes
Do export trade finance companies or agencies not only offer export financing but also provide information and support for export working capital?

1 Answer

3 votes

Final answer:

Export trade finance companies offer both export financing and support for export working capital, including guidance on cash flow and international markets. They sometimes assist in infrastructure development. Balancing trade surplus and capital inflow is beneficial but can risk creating trade imbalances due to exchange rate fluctuations.

Step-by-step explanation:

Yes, export trade finance companies or agencies offer more than just export financing. Alongside providing the necessary capital to help businesses grow international sales, these entities also offer crucial information and support for export working capital. This support includes guidance on managing cash flow, credit risk assessment, and advice on international market conditions. These services help companies navigate the complexities of international trade, especially regarding competition, legal, and regulatory environments. Export finance agencies often assist with the development of economic infrastructures such as ports and communication facilities, vital for a country to achieve successful development in international trade.

Furthermore, the presence of a trade surplus and a healthy inflow of capital from abroad is usually regarded as a positive economic indicator. However, striving for both may lead to risks such as an exchange rate that causes a trade imbalance and very high inflows or outflows of financial capital. Cross-checking international flows of goods and capital against data from various sources, like shipping industry data and reports filed by banks and companies, is crucial to maintain accurate trade statistics and balance of trade.

User HemalHerath
by
8.2k points