Knowledge about the correspondent banking relationship

Reference no: EM131865060

Consider U.S. importer desiring to purchase merchandise from Dutch Exporter invoiced in euros, at a cost of €750,000. U.S. Importer will contact his U.S. Bank and inquire about $/€ exchange rate. Say U.S. Bank offers a price of $1.3092/€1.00. If U.S. Importer accepts the price, how this transaction will be completed? Assume EZ bank is U.S. bank’s correspondent bank in euro zone. Hint: use your knowledge about the correspondent banking relationship.

Reference no: EM131865060

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