For many developing and emerging economies, annual inflows and outflows of trade can surpass the countries total GDP. Most of these flows are tied to contractual agreements denominated in a foreign currency. Aggregate risk from exchange rate fluctuations through this trade channel alone should...

This report, commissioned by Sveriges Riksbank, examines the role of currency denomination in international trade transactions. It is divided in two parts. The first part consists of a survey of the price setting and payment practices of a large sample of Swedish exporting firms. The second part...