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How countries exchange money?

sdw123
By sdw123
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Anyone knows behind the scene process? Let's say WHO donate 100mil USD to Ethiopia. Of course they don't deliver 100mil notes right?

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It is quite fascinating how come we arrive at such a discussion, but if we dig deep, I’m sure many would be fascinated by the whole money exchange process across countries. As you mentioned, even the process of transfer of money between WHO and other countries is always questioned!

 

Even I do not know the exact method or answer to this question, but I’d like to share about the exchange rate concept involved in money exchange across countries. Some of the factors that influence the exchange rate are purchasing price parity, geopolitical risk factors, stability of the government, currency, etc.; all play a huge role in determining the exchange rate of currency across nations and I strongly feel this one plays a major part.

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All countries have central banks / treasuries.

 

 

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Private exchange businesses basically keep “stock” for various currencies.

 

So if you walk into an exchange store, you’re buying some of their stock. 
 

I don’t know about large scale conversions though - including digital conversion. 

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4 hours ago, sdw123 said:

Anyone knows behind the scene process? Let's say WHO donate 100mil USD to Ethiopia. Of course they don't deliver 100mil notes right?

Of course not. Our Money System is a Joke. JFK was murdered for trying to change that.

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Central banks have accounts with other countries central banks. The WHO and Ethiopa may both have accounts with the Bank of England, so they would transfer the funds as a simple domestic transfer. The funds are then there for Ethiopa to use.

 

It may not be a direct transfer of funds, but rather paying off a debt to reduce the countries spending on repayments. The financial system is a colossal mess that some how manages to keep standing under it's own weight. It is slowly changing but the old mololithic systems that started the electronic banking systems are still being used in one way or another.

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The aid value can be transferred in a number of ways:

- Most commonly the aid is in the form of tangible goods, e.g. actual crates of food 

- Similarly, the money can be transferred to independent agencies on the ground which work to purchase and distribute goods or services

- The money can be electronically transferred to a commercial bank account owned by the recipient country

- In unusual cases, actual crates of physical currency are shipped to the recipient

 

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Actually transferring money, electronic or physical, is avoided as there are numerous cases in history where the recipient didn't use the money for the assigned purpose. Additionally many of the countries in need of aid would struggle to actually make use of the money. Just because they have piles of cash doesn't mean they can easily purchase food or other supplies. It's more effective to just directly provide the goods they need.

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28 minutes ago, Praesi said:

Of course not. Our Money System is a Joke. JFK was murdered for trying to change that.

JFK was also on to what the CIA was doing 

▓ƆԀ▓ S▓₱▓Ɇ▓c▓s▓: i7 6ʇɥפᴉƎ00K (4.4ghz), Asus DeLuxe X99A II, GT҉X҉1҉0҉8҉0 Zotac Amp ExTrꍟꎭe),Si6F4Gb D???????r PlatinUm, EVGA G2 Sǝʌǝᘉ5ᙣᙍᖇᓎᙎᗅᖶt, Phanteks Enthoo Primo, 3TB WD Black, 500gb 850 Evo, H100iGeeTeeX, Windows 10, K70 R̸̢̡̭͍͕̱̭̟̩̀̀̃́̃͒̈́̈́͑̑́̆͘͜ͅG̶̦̬͊́B̸͈̝̖͗̈́, G502, HyperX Cloud 2s, Asus MX34. פN∩SW∀S 960 EVO

Just keeping this here as a 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I think this is what money market funds are for.  I got no information though.  I’m sure it’s a well known boiler plate process though.  There are some weird rules.  The big thing Regan did in the 80’s was make all oil trading done in dollars.  It propped up the dollar a lot.  One of those temporary solutions that tend to come back and bite one later.

Not a pro, not even very good.  I’m just old and have time currently.  Assuming I know a lot about computers can be a mistake.

 

Life is like a bowl of chocolates: there are all these little crinkly paper cups everywhere.

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Maybe they don't donate 100 million physical dollars, but rather products for the value of $100m.

"We're all in this together, might as well be friends" Tom, Toonami.

 

mini eLiXiVy: my open source 65% mechanical PCB, a build log, PCB anatomy and discussing open source licenses: https://linustechtips.com/topic/1366493-elixivy-a-65-mechanical-keyboard-build-log-pcb-anatomy-and-how-i-open-sourced-this-project/

 

mini_cardboard: a 4% keyboard build log and how keyboards work: https://linustechtips.com/topic/1328547-mini_cardboard-a-4-keyboard-build-log-and-how-keyboards-work/

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money is simply numbers.

 

who scratched some numbers from their account, the bank verifies, then notify ethiopia, which then verify their account.

this is how transaction works. some numbers are cut in the name of taxes and fees ofc.

 

the thing you saw in movies that with a progress bar is just cliche

why everybody post the spec of their rig here? i dont! cuz its made of mashed potatoes!

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