Needing assistance with an original discussion of the following:
? Explain hard and soft currencies
? Analyze hard and soft currencies in relation to global business strategies
? How are they used in global financing operations
? Describe importance of managing risks.
Please find the guidelines for Global Business Strategies.
Running Head: CURRENCY
Hard & Soft Currency
Currency plays an important role in the international business and in global business strategies. The current international business environment includes multi currency economy. In the multi currency economy several currencies of various natures are used by the nation in their global business operation. The currency can be defined as everything that could be considered as reserve. There are various styles of currency in which major are soft currency and hard currency (Shoup, 1998). This paper will explain the hard currency and soft currency and their role in global business operations.
Hard and Soft Currency
The hard and soft currencies are the major style of currency that is used in the global financing operations. Following are the explanation of these currency styles -
Hard Currency - Hard currency can be defined as the currency that is accepted worldwide in the form of payment of goods and services. It remains stable or can be said that it doesn't expected to depreciate significantly in near future. This currency remains highly liquid in the foreign exchange market (Jonnard, 1998). The several factors are there that contribute in the hard status of currency such as political stability, significant & consistent monitory & fiscal policies, low inflation rate etc. The demand of hard currency is also high in the foreign exchange market due to its stable nature.
Soft Currency - Soft currency can be defined as the currency that is not converted fully in all currencies. The value of soft currency depreciated rapidly that reduces its ability to convert in other currency. The soft currency can be converted in soft currency easily but it is not convertible against hard currencies in an effective manner (Isaac, 2009). The use of soft currency in international business is quite opposite than hard currency as it is also ...
The solution discusses global business strategies and global financing.