Second Interview Flashcards
To improve on what has previously been learnt. Don't overcomplicate the answers, keep them basic and easy to remember.
What is a Foreign Exchange?
What: Exchanging a currency of one country for another at the current exchange rate.
Where: The Foreign Exchange Market.
How: Currencies are traded in pairs, and fluctuate based on supply and demand.
Why is it important?: Forex prices determines the value of one currency against another, which in turn affects global trade and consumer prices.
What causes currencies to Rise and Fall?
1) If a country is buying raw materials or natural resources from another, then this causes the demand for the ‘quote currency’ (Or countries currency) demand increase and therefore the price of the currency rises.
2) Another reason, Is when a country makes their interest rates go up and down by changing the supply of money. If countries decrease the supply of their money then the prices of that currency increase. (Interest rates would also increase, making it more attractive to an investor.).
- It has to be a stable economy.
3) Scary global economic environments. Investors would then want to invest in a safer currency.
Who does Ebury Target and Why?
Ebury Primarily serves SMEs engaged in international trade.
These businesses often face challenges accessing financial services tailored to cross-border operations.
Ebury then addresses this gap by offering solutions like trade finance and FX risk management, which are typically available only to larger enterprises.
What industries does Ebury target?
1) Importers and Exporters
– Why? These businesses regularly trade G&S across borders, requiring FX services to pay suppliers or receive payments from overseas customers.
–Examples: manufacturing, wholesale distribution, consumer goods companies.
2) E-commerce
–Why? E-commerce businesses often sell to customers in multiple countries and need to convert Foreign sales revenues into their home currency.
–Examples: Online retail platforms and drop-shipping businesses.
3) NGOs and Charities
– Why? Many NGOs operate in regions with different currencies, requiring solutions for cross-border payments, mass payouts, and currency hedging.
–Examples: Humanitarian Organisations and development agencies.
4) FMCG (Fast Moving Consumer Goods)
– Why? FMCG companies often deal with international supply chains and require optimised payment cycles and FX solutions for cost effciency.
–Where the margins are smaller, FX is even more crucial.
–Examples: Food and beverage producers, toiletries, and household goods manufacturers.
What are Treasury solutions and Examples. (Ebury based)
The Treasury solutions encompass a suite of services designed to help businesses manage their financial assets, optimise liquidity, and mitigate risks associated with currency fluctuations and international transactions.
1) International Payment and Collections: Facilitates seamless cross-border transactions in over 130 currencies.
2) FX Risk Management:
Ebury provides bespoke hedging strategies to protect businesses from exchange rate fluctuations, helping to optimise profit margins and manage currency risk effectively.
3) Global Currency Accounts:
Businesses can open multi-currency accounts quickly, allowing them to manage funds across 35+ currencies.
4) Business Lending: Ebury offers flexible lending solutions, such as trade finance facilities, to support international trade activities and ensure businesses have the necessary working capital.
Why use an FX provider?
1) Cost Efficiency
- Banks often charge high fees. Ebury offer better exchange rates and lower transaction fees.
2) Risk Management
- Currency exchange rates are volitle.
This allows businesses to use hedging stratergies like a forward contract to lock in exchange rates.
3) Access to a Wide Range of Currencies
- 130 currencies, providing access to emering market currenceis. Allows you to operate in diverse global markets
4) Faster international payments.
- Banking systems can take several days to process international transactions. Ebury uses its streamiled payment infastructure.
5) Multi-Currency Accounts
- Managing accounts in multiple currencies can be slow. Ebury allows businesses to hold, manage, and pay in multiple currencies through dedicated currency accouunts.
6) Trade Finance
Importers/exporters often face working capital shortages. This can bridge payment gaps
