Opinions expressed at onasisforex. Plustocks Limited Plustocks, founded in , is a binary options broker based in Schaffhausen, Switzerland. Using a documentary remittance, the seller authorises the bank to present forwarding and transportation documents to the buyer, after the contractually agreed payment has been made.
BREAKING DOWN 'NAD (Namibian Dollar)'
A method of payment commonly used in International trade transactions, whereby the advising bank facilitates payment to the exporter, provided the exporter complies with the terms and conditions of the letter of credit.
A letter of credit may also be referred to as a documentary credit. Irrevocable letter of credit may not be cancelled or changed without any consent of all parties involved importer, exporter and the issuing bank.
Namibian exporter is assured of receiving payment if it complies with all terms and conditions of the letter of credit. Sight — payment made to the seller when the required documents have been submitted to the authorized bank. It also minimises risks associated with the transaction. Mitigate risks in international trade when the parties to the transaction have new and untested business relation.
The bank that has issued the letter of credit has an obligation to pay, when credit conform documents are presented to the bank. The issuing bank will effect payment even if the buyer defaults and is unable to meet their payment obligations.
Revocable LC — The buyer and the bank that established the LC are able to manipulate the LC or make corrections without informing or getting permission from the seller. A Customer Foreign Currency Account, is a useful mechanism for managing the flows of foreign currency. Customer Foreign Currency account also Called CFC Account for Companies active in the international market, be it trade or for the provision of services.
CFC accounts are held for Importers and exporters for the movement of goods only. Service providers associated with import and export transactions, are namely ships agents, freight forwarders, marine insurance brokers, tour operators, and entities with similar business operations.
Forward exchange contracts are used to secure a rate today for settlement at some time in the future, usually longer than two business days. Methods of delivery that can take place with a FEC are:. Early delivery — When forward exchange contract is used before the maturity date of a fixed contract or during the fixed period of a partially optional contract.
Extension — When forward exchange contract is used before the maturity date of a fixed contract or during the fixed period of a partially optional contract. When an importer is unable to use the forward exchange contract.
If an order is cancelled, the forward exchange contract must be cancelled at the prevailing spot exchange rate, which can result in financial loss. They cater for a diverse type of commercial and financial transactions and both importers and exporters can make use of it.
Once a customer has covered a transaction with forward exchange contract, it cannot take advantage of any favourable exchange rate movements. Early deliveries, extensions and cancellation during the fixed period of the foreign exchange contract can result in a financial loss. The period of cover should not exceed 12 months at a time.
Documentary evidence is needed to establish the FEC. Purchase of foreign currency in cash for individuals, residents and non-residents. Sale of foreign currency in cash for national currency to resident individuals. Accepting foreign bank notes. Conversion exchange of foreign currency in cash.
Advantages It is a secure form of payment It is convenient and fast Funds sent are available after 3 working date or on value date. The Rand is still legal tender, since the Namibia Dollar is pegged to the Rand.
Namibia is the fourth-largest exporter of non-fuel minerals in Africa, produces large amounts of zinc, lead, tin, tungsten, and silver, and is the fifth-largest uranium producer. Almost half of the population depends on agriculture for survival.
Privatization of Namibian enterprises is one of the reasons for future investment. History The South African Rand was the official currency from to