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Money and credit - Ivanov V.M.


14.1. Definition of international settlements

International settlements are a system of organization and regulation of payments for monetary claims and obligations arising in foreign economic activity between states, organizations and citizens located in territories of different countries. The main intermediaries of international settlements are banks that provide interstate cash flow of their customers - participants of foreign economic activity on the basis of correspondent accounts. Most international payments are made by bank transfer.

The following factors influence the state of international settlements in a complex manner: situation in commodity and money markets; degree of use and effectiveness of government measures; regulation of interstate flows of goods, services and capital; differences in inflation rates in individual countries; balance of payments status, as well as terms of foreign trade contracts; international rules and customs; features of banking practice; currency legislation, etc.