On the ninth day of Christmas my cash management expert gave me tips on how to:
by Kylene Casanova
Maximising the release trapped cash in countries worldwide by:
- one leading corporate treasurer believes that mostly you shouldn’t accept that the cash is trapped: Often there is a process to access cash provided you approach the local authorities and take time to understand the requirements. Similarly, you may have cash on a capital account, e.g. in China. You could argue it is trapped, but is it really when you can repatriate capital through a process? Of course, cash can be really trapped – it may require a levy or charge that is unacceptable. Overall, he believes that most cash isn’t trapped. See also: Releasing trapped cash - the real truths | C&TM File
- improving cash flow forecasting so that money is unnecesssary pumping of funds into a country, see: Six success factors for a more flexible way of forecasting | C&TM File, 5 best practice tips for forecasting success and the 5 common mistakes to avoid | C&TM File
- using inter-company netting to minimise trapped cash, see: Citi pioneers Global RMB Netting Solution with Samsung Electronics | C&TM File, Inter-company netting - undervalued and underused | C&TM File
- using the on-shore money market funds if you have to keep cash locally, such as: JPM launches new on-shore RMB money market fund with unique same-day liquidity | C&TM File
- Citi’s Fernando Almansa believes corporate treasurers need to consider 1) strategic/structural solutions, e.g. legal vehicles for payables and receivables, internal companies, AND 2) tactical solutions including:
- cross-currency solutions including: cross-border interest optimisation structures
- optimisation of global liquidity through an efficient cash management structure
- cross-border pooling solution for markets that become liberalised
- regular repatriation as allowed (see Fernando’s excellent article here).
Like this item? Get our Weekly Update newsletter. Subscribe today