A collection account is a specific type of bank account opened with the purpose of reducing bank float for remittances from specific customers or groups of customers, often those located abroad or who remit payments in a foreign currency.
Exchange control refers to government-imposed restrictions on the purchase and sale of foreign currencies. These controls are often instituted by countries experiencing shortages of hard currencies and can include different regulations for transactions that affect the capital account of the balance of payments.
A gain or loss resulting from an exchange-rate fluctuation arising from the conversion of other currencies into the domestic currency.
Foreign currency refers to the currency of another country, which is not used in the preparation of an organization’s domestic accounts. This term is important in financial reporting for organizations with international transactions or operations.
A forward contract involves the actual purchase or sale of a specified quantity of a commodity, government security, foreign currency, or other financial instrument at a price agreed upon now, with delivery and settlement at a future specified date.
The International Monetary Market (IMM) is a division of the Chicago Mercantile Exchange that specializes in trading futures contracts on various financial instruments including U.S. Treasury bills, foreign currency, certificates of deposit, and Eurodollar deposits.
Monetary reserve refers to a government’s stockpile of foreign currencies and precious metals used to support its currency. It is also the Federal Reserve Board's requirement for banks to keep a certain proportion of their deposits in cash or near-cash equivalents.
Selling short involves selling securities, commodities, or foreign currencies not actually owned by the seller, with the hope of repurchasing them later at a lower price to earn a profit.
