Currencies. Pounds and Pence, Dollars and Cents

The basic unit of British currency is the pound. One pound is 100 pence. There are eight different British coins : there are one-pence coins, two-pence coins, five-pence coins, ten-pence coins, twenty pence coins and fifty-pence coins. There are also one-pound coins and two- pound coins. Then there are five – pound notes and fifty- pound notes.

The basic unit of American currency is, of course, the dollar. One dollar is 100 cents. There are five different coins : there are one-cent coins, five-cent coins , ten-cent coins, twenty five cent coins and fifty-cent coins. There are one-dollar notes, five dollar notes. Ten-dollar notes, twenty-dollar notes and one –hundred-dollar notes.

Usually the exchange rate is about one and a half dollars to the pound.

Note:Американцы называют « купюру» словом bill , поэтому в США принято говорить one-dollar bills, five-dollar bills, etc..

· Обратите внимание , что говорится I’ve got five pounds, but I’ve got a five-pound note.

The Exchange Rate.

Interest rates affect domestic monetary conditions and thus borrowing, consumer demand, investment, output and ultimately pri ces. They can also have an effect on the value of sterlingin terms of foreign currencies. Other things being equal, higher interest rates will tend to attract foreign funds into serling, and thus increase the sterling exchange rate against other currencies.

Foreign exchange markets can also be affected by official operations.Management of the UK’s gold and foreign exchange reserves is carried out by the Bank on behalf of the Treasury. The reserves are held in a governmentaccount called the Exchange Equalization Account,which was set up in 1930s after Britain left the gold standard : its purpose was and remains to check undue fluctations in the external value of sterling. This process, known as intervention, involves the Bank buying sterling in exchange for foreign currencies when it wants to curb a fall in sterling – or alternatively selling sterling if it wants to curb it rise.

Vocabulary:

Exchange rate обменный курс

Demand – спрос

To have an effect on – влиять на…

Equal to – равный

On behalf of – от имени, по поручению

Exchange Equalization –

Account – Валютно-уравнительный счёт

Undue – не должен иметь место

Fluctation – колебание

External – внешний

Intervention – вмешательство

To curb - прекратить, остановить

Answer the questions:

1. Do interest rates affect the sterling exchange rate against other currencies?

2. What is the main purpose of The Account?

3. What is EURO?

4. What is the position of the UK , t owards EURO?

5. Will interest rates affect the EURO exchange rate against other currencies or not?

Lesson III. Skills . Forms of Payment. Letter of Payment.

Ways of Payment

Read the text and translate it into English:

Наиболее распространёнными способами оплаты при расчётах с деловыми партнёрами как внутри наше страны, так и с зарубежными компаниями являются :

1.Вексель –ценная бумага,(долговая расписка, закладная),содержащая безусловное денежное обязятельство об уплате определённому лицу или предъявителю векселя определнной суммы в определённый срок.

2. Аккредитив -поручение одного банка другому о выплате определённой суммы физическому или юридическому лицу при выполнении указанных в аккредитивном письме условий; денежный, именной документ, выдаваемый банком лицу, внесшему определённую сумму и желающему получить её полностью или частями вдругом городе в течение определённого времени.

3. Безотзывный аккредитив - аккредитив, который не может быть закрыт лицом, открывшим его, или банком-эмитентом без согласия получателя кредита.

4. Банковский трансферт – передача денег из одного банка или банковского счёта в другой; документ, который разрешает это.

5. СИФ -условия оплаты транспортировки товара морским путём.

Remember these definitions:

1. Bill of Exchange –a signed document, such as a cheque, that orders a person or an organization , such as a bank, to pay a fixed sum of money on demand or on a certain date to the person specified.

2. Letter of credit – a letter from one bank to another , by which a third party, usually a customer, is able to obtain money.

3. Irrevocable letter of credit – a letter of credit that can only be cancelled with the agreement of the person expexting payment.

4.Bank transfer – the removal of money from one bank or bank account to another, adocument that allows this.

5. CIF – is a condition of sale for goods carried by sea where the seller pays for loading and transporting the goods and arranges marine insurance.

Read the dialogues: Dialogue I.

A. Good morning, madam.

B. Good morning. My husband asked my bank in England to transfer $ 1.000 to you in my name.

A. Have you got your passport, please? Thank you. What’s the name of your bank?

B. The Highland Bank, 18, Pickwick Road, Brighton.

A. Just a moment, please. We have received a transfer, but it is in your husband’s name. So, I’m afraid he will have to the bank to collect it.

B. That’s very annoying. I need the money and he isn’t available tilthe evening.

A. I’m very sorry, madam, but I really can’t do anything.

B. Oh, well. Too bad.

Dialogue II.

A. Good morning.

B. Good morning, sir.

A. I ‘ve asked me bank ,the First National Bank of New York, to transfer $2000 to you in my name. I’dliketo know if the money has arrived.

B. I’ll see. Could you give me your passport, please? Thank you. Themoney has arrived, sir, but I’m afraid the passport numbers don’t correspond.

A. What does that mean?

B. That until we receive identification from your bank we can’ pay you. If you like I can send a telex, but I»ll have tocharge it toyou.

A. That’s all right. How long will it take?

B. We may get an answer either this afternoon or tomorrowmorning.

A. Thank you. I’ll come tomorrow then. Good bye.

Leter of Payment.

New York City Bank

Rockroad Avenue, Bruklin 7

Telephone 245 139/ 52/4

Telex : Canberry Cn / 35/4

Fax: 457825

Mr. Stanislav Proskurin

N.A. Chief Executive Bank Manager

47 Rimsky Corsakovv Street

Bank Sankt Petersburg

Saint Petersburg

Dear Mr. Proskurin,

In accordance with our agreement, concerning the delivery of a garment consignment, orfer FJ/ 537 , signed

last month we are glad to assure you about our capacity of payment by Bill of Exchange not later than 25.10/2006. We clearly understand that part payment is not available, we asked our Bank to open a sight draft.so we could provide the payment on time.

Thank you very much for your patienсe. I hope we will deal with your Bank in the future.

Sincerely yours

Tim Warren

Marketing Department Manager.

Enclosure: Copies of Drafts of our corresponding Bank in Russsia.

Test:

1. Continue the talk:

At a Group Training Seminar in England , export sales executives arelistening toa Senior Finance Manager. He is briefing them about the payment system between the firm and its different customers.

There are four systems that we use. Cash with order is ideal but most customers want a period of credit, so it;snot always easy to insist on the cash first.

The next one I would mention is open account; and there are three ways that open accountcustomers can pay us: by cheque, be telegraphic transfer, or by mail transfer. But we don’t give customers open facilities until we have references from two major firms and from abank. Open account is OK with people you know well, but don’tgo round offering it to strangers!

Now, billsof exchange, or drafts. We use twotypes of bills of exchange: sight drafts , which are a little like cheques: and time billls, which are payed after a certain period . OK? Sight bills , time bills , OK.

Now, the type of payment system I prefer to use is the irrevocable letter of credit. The word « irrevocable» is important. It means that there ‘sno risk: the bank guarantees that we get our money: and that’s the way I like it…

Do you know these words?

To brief smb.- инструктировать кого-либо

Sight bill – вексель, оплачиваемый по предъявлению

Time bill – вексель, имеющий фиксированный срок

II. Check if you remember:

1.What is the idea of payment by cash?

2.In what three ways can payment on an open account be made?

3.On what conditions do sellers usually accept payment on an open account?

4.What is a draft?

5.What two types of bills of exchange are there?

6.What guarantees do irrevocable letters of credit mean?

7.What terms are ideal for sellers?