Clearing
From Supply Chain Management Encyclopedia
Russian: Клиринг
A clearing arrangement [1] (also called a bilateral clearing agreement) is a form of barter in which the counterparties (governments) contract to purchase a certain amount of goods and services from one another. Both parties set up accounts with each other that are debited whenever one country imports from the other. At the end of an agreed-upon period of time, any account imbalances are settled for hard currency, or by the transfer of goods. The clearing arrangement introduces the concept of credit to barter transactions, and means bilateral trade can take place and does not have to be immediately settled. Account balances are periodically determined and any trade imbalances are settled in an agreed-upon currency. It is known that last two decades bilateral clearing agreements have usually taken place between Third World and Eastern European countries.
There are different fields of clearings: trading, banking, stock exchanging, currency exchanging. However, there is a currency clearing [2] that is in the subject of the present article. This is a settlement system between the participants of foreign trade on the basis of international clearing systems (cyberclearing included) and intergovernmental clearing agreements. The most important actors of currency clearings are clearing banks that deal with accounting and offsetting assets and liabilities, can also lend to members clearing operations.
Therefore, there are two different classes of international clearing arrangements in international trade:
References
- ↑ Eun, Ch.S., Resnick, B.G. International Financial Management, McGraw-Hill, Irwin, - Ch. 20.
- ↑ Katasonov, V. International clearing - our answer to monetary and financial U.S. dictates. RUfacts - http://ru-facts.com/news/view/35377.html
