Global Cash Flow: The Art of

International Transactions

International Economics Team Teaching

Introduction to International Transaction
• International transaction refers to the exchange of goods, services or
money between two or more countries. It is an essential part of the
global economy and has become increasingly important in recent
years.
• The rise of globalization and advances in technology have made it
easier than ever before for businesses to engage in international
transactions. However, there are also many challenges and risks
involved, including currency fluctuations, political instability, and
cultural differences.
Types of International Transactions
• There are several types of international transactions, including
exports and imports, foreign direct investment, and portfolio
investment. Exports and imports refer to the buying and selling of
goods and services between countries, while foreign direct
investment involves a company investing in a foreign business or
building a new facility in another country.
• Portfolio investment, on the other hand, involves buying stocks,
bonds, or other financial assets in a foreign country. Each type of
international transaction has its own advantages and risks, and
businesses must carefully consider which type is best suited to their
needs.
Balance of Payment
• The balance of payments (BOP) is the method countries use to
monitor all international monetary transactions at a specific period.
Usually, the BOP is calculated every quarter and every calendar year.
Kaitan antara Aktivitas Makroekonomi dan International Account

● Balance Sheet dan Closing

Sheet akan dicocokkan
dengan GDP yang
keluar/masuk
● Asumsinya, terjadi
perubahan keseimbangan
dalam GDP (keluar atau
masuk
Komponen Neraca Pembayaran Internasional

● Neraca Transaksi Berjalan (Current Account)

● Neraca Transaksi Modal (Capital Account)
IA - Overview

● Current Account
● Capital Account
● Financial Account
International Investment Position
Transaksi Berjalan (CA/Current Account)

● Current Account adalah total

Capital Account dan Financial
Account. But Why?

Perhatikan! Terdapat Perbedaan antara Balance dan Current!!

The current account is the sum of net income from abroad, net
current transfers, and the balance of trade. The balance of payments
includes the current account and the capital account.
Benefits of International Transactions
• International transactions offer numerous benefits to businesses,
including access to new markets, lower production costs, and
increased revenue. By expanding into new markets, businesses can
tap into new sources of demand and increase their customer base.
• Lower production costs can be achieved by sourcing materials or
labor from countries where they are cheaper, while increased
revenue can be generated through increased sales and profits. In
addition, international transactions can also lead to knowledge
transfer and innovation, as businesses learn from each other's best
practices and technologies.
Challenges of International Transactions
• Despite the benefits, there are also many challenges and risks
associated with international transactions. One of the biggest
challenges is currency fluctuations, which can impact the cost of
goods and services and affect profit margins.
• Other challenges include legal and regulatory issues, political
instability, cultural differences, and logistical difficulties. Businesses
must be prepared to navigate these challenges and mitigate risks in
order to succeed in international markets.
Factors to Consider in International
Transactions
• When considering international transactions, businesses must take
into account a variety of factors, such as market size, consumer
behavior, and cultural norms. They must also assess the political and
economic environment of the country they are entering, as well as
any legal or regulatory barriers that may exist.
• In addition, businesses must also consider the logistics of
international trade, such as shipping and customs procedures, as well
as the potential impact of currency fluctuations on their bottom line.
By carefully weighing these factors, businesses can make informed
decisions about whether or not to engage in international
transactions.
Conclusion
• International transactions are an essential part of the global economy
and offer numerous benefits to businesses. However, they also come
with significant challenges and risks that must be carefully considered
and mitigated.
• By understanding the different types of international transactions,
their benefits and challenges, and the factors that must be taken into
account when engaging in them, businesses can successfully expand
into new markets and thrive in the global economy.