International monetary relations: what is it

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

International monetary and credit relations - the total system of economic relations that arises between countries in the process of acquiring various goods and providing services. The entire payment and settlement system that arises between suppliers, consumers, importers and exporters across countries is directly influenced by monetary relations.

International monetary and credit relations have come a long way in their development. It was in ancient Greece and Rome that the commodity exchange and bill of exchange system first appeared, which later spread throughout Western Europe.

Further development of international monetary and financial relations received in the banking system. This happened when feudalism was replaced by the capitalist system. Creation of a global world market, due to a complex system of interconnection of production forces and relations, deepening and division of labor processes, as well as their complete mechanization and robotization, the formation of a global system of economic relations, the process of globalization and internationalizationall economic relations - it is this combination of factors that has a huge impact on international monetary and credit relations.

When a country needs to purchase certain products that it does not produce itself, it becomes necessary to seek assistance from the power that is the manufacturer of this product. At the same time, the question reasonably arises - how to pay for this product if the buyer's currency is not quoted on the seller's market, and the buyer does not have the supplier's currency in stock? It was this need to exchange their own means of payment that led to the formation of the foreign exchange market. This mechanism was the basis for the emergence of such a category as international monetary and credit relations.

In such an economic mechanism as the monetary system, there are many important elements, the main of which is the exchange rate. This component is necessary for conducting foreign exchange transactions in the implementation of trading activities, in the circulation of capital and loans. It is also worth noting that the exchange rate is an invariable component in the process of comparing world and national markets, as well as using various economic indicators reflected in national or foreign currency. In addition, it is this element that characterizes international credit relations and is used to revalue the accounts of various companies and banking organizations. This process takes place withgenerally accepted international legal tender.

International loans are directly involved in every stage of capital turnover:

1. the first stage is the transformation of the total capital of funds into its production analogue. This happens through the acquisition of equipment produced outside the country, a variety of raw materials, energy and, of course, fuel;

2. the second stage is sometimes the release of loans for work in progress;

3. the final stage is the sale of manufactured goods on the world market.

There are many organizations that regulate international monetary and credit relations. The most important of them is the IMF. Its name stands for International Monetary Fund. A huge number of other organizations operate on the territory of states, one way or another connected with the activities of countries on the world market.