a) financial operations connected with settling payments in foreign trade as well as international money and capi tal movements,
b) concluding agreements with foreign firms,
c) converting one currency into another.
2. "the yen which the Japanese businessman has available":
a) wants to exchange,
b) has in abundance,
c) has at his disposal.
3. "foreign exchange deals spring from":
a) refer to,
b) are the result of, -*
c) imply.
4. "placed to the credit of:
a) entered on the credit side of an account,
b) considered to be favourable for, \
c) a credit granted to. \
5. "the operation in reverse": Y
a) conversion of foreign exchange into the currency of a given country, <
b) conversion of bank notes into foreign exchange,
c) remitting bank notes abroad.
6. "a currency is usually called convertible":
a) only residents of a country can remit their payments abroad,
b) it can be changed into any other currency without any restrictions, \
c) non-resident can instruct the bank to convert their earn ings into any other currency.
7. "a person domiciled in Britain":
a) one being on a business trip,
b) one living permanently in,
c) one touring the country.
8. "the proceeds":
a) money arising from converting one currency into another,
b) earnings from the export of goods,
c) foreign currency held with banks abroad.
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9. "except with the consent of the Bank of England":
a) provided you apply for a permission to the Bank of England,
b) only in case the Bank of England grants a permission,
c) only if one has an account with the Bank of England. 1.0. "the latter":
a) funds arising both from current transactions and finan cial operations,
b) funds arising from current transactions,
c) funds arising from purely financial operations.
11. "being subject..... to a restriction on convertibility":
a) being externally convertible,
b) being freely convertible,
c) being under control of exchange regulations.
12, "two-tier markets":
a) economies which draw distinctions between current transactions and financial operations as regards ex change regulations,
b) two-storey department stores,
c) oeonomies permitting free money and capital move ments.
6. A person domiciled in Britain can as a general rule ex port capital only wilh the consent of the Bank of En gland.
7. In Belgium funds arising from current transactions are subject to a restriction on convertibility.
Ill
Answer the following questions:
1. What is the basis of foreign exchange dealings?
2. What would a Japanese buyer have to do if he wanted to purchase a machine from a Swiss exporter?
3. What would happen to foreign exchange dealings if a single world currency were created?
4. How would you define "foreign currency''?
5. What is the job of a foreign exchange dealer?
6. On what condition do foreign bank notes liecome foreign exchange?
7. What is a fully convertible currency?
8. What is a partially convertible currency?
9. Give examples of currencies which are fully convertible and partially convertible.
II
Say what is true and what is false. Correct Hie. false, sen te,nce.s:~
1. To facilitate foreign exchange dealings single world cur rency should be created.
2. In the trading of foreign exchange between banks only foreign currency held with banks abroad is concerned.
3. Foreign bank notes are foreign exchange.
4. The conversion of foreign exchange into bank notes of the given country is nearly always permitted.
5. The holder of Swiss francs can convert them into other currencies provided he is a resident of Switzerland.
IV
Vocabulary study.Supply the missing member of the, pair in each case:
Verb
Noun
to move to exchange to convert
supplier dealer, dealings restriction
to permit to instruct
establishment disappearance
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Collocation.Find the nouns which are qualified in the text by these adjectives and write one. noun to each adjective: convertible international
current local
domestic ordinary
external partial
financial unrestricted
foreign
VI
Combine the. words listed below into meaningful two or three word expressions as possible. Some are used in Hie text (capital movement, foreign exchange dealings). business foreign
bank money
capital movement
currency market
dealings notes
dealer regulation
exchange two-tier
Eurodollar world
VII
For each of the following phrases find the expression in the text which it explains and note, that expression.
1. International trade and international money and capital movements.
2. Extra money held by a bank.
3. Money used within a country.
4. Money in circulation abroad.
5. Funds, bills, cheques held with banks abroad in foreign currency and payable abroad.
6. A currency that can be changed freely into any other currency.
7. Money coming from the sale of goods and services.
VIII
Complete the following sentences in English:
1. If a bank wants to place excess funds in the Eurodollar market ......
2. Foreign bank notes can become foreign exchange provided
3. A currency is called convertible if..... \
4. Sterling funds are partially convertible because only...
5. In Belgium, France and Italy a distinclio\i is drawn be tween....... \
IX
Demonstrate the meaning of each of the following expressions in sentences of your own:
1. to conclude the transactions ,-— '" ' '
2. to place excess funds [
3. to buy dollars against local currency
4. to convert into
5. to remit the proceeds abroad
6. to export capital
7. to be subject to a restriction
8. to be fully (partially) convertible
X
In the sentences of this text every sixth word has been left out. Write in the word that fits best:
The Foreign-Exchange market is ..... market which has
no central..... place, but operates through the..... offices of
the banks concerned.... overseas trade. The main preoccu-
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pation .... the foreign-exchange dealers is ... secure sup plies of foreign currency .... required lo finance interna tional trade..... price of foreign currencies, like.... prices,
is determined by the.... for that currency and the..... of it.
The demand for..... currency depends on the demand ....
that country's goods and services ..... foreigners, and the
supply of... currency depends on how many... goods and
services its home.... wish to buy. Capital movements......
also affect the exchange rale.... making supplies of a cur rency .... on lorig-lerm loans or