 Multicurrency OptionsJ. A. Donaldson and
T. H. Donaldson
Chapter 6 in The Medium-Term Loan Market, 1982, pp 93-107 from Palgrave Macmillan Abstract: Abstract Nowadays banks lending in the medium-term eurocurrency market usually offer their customers a multicurrency option under which they undertake to lend, subject to certain qualifications referred to later, any convertible currency. In chapter 4 a description was given of the way in which interest rates are normally set at a margin over LIBOR. The LIBOR rate which applies is that ruling at the time in the eurodeposit market for the currency chosen by the customer. However, the depth of the deposit market varies as between different currencies both in relation to the size of the domestic market and to the stringency of local exchange controls. It is important therefore to understand how banks have ready access to the necessary funds to be able to provide their customers with such flexibility. To this end it is necessary to consider briefly the workings of the foreign exchange market which runs in parallel with the eurocurrency deposit market; indeed so interwoven are the activities of the two markets that in many ways it is simpler to regard them as one. Keywords: Exchange Rate; Interest Rate; Foreign Exchange Market; Base Currency; Swiss Franc (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-06242-3_6 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-06242-3_6 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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