This book discusses International Financial Management. It covers the basic concepts and scope of international finance, the global financial system and its role in the world economy, the foreign exchange market in international financial transactions, currency exchange rates and the factors that influence them, exchange rate risk management in international business, and capital structure in multinational corporations.

International finance is a field of finance that studies the various financial decisions, activities, and risks that arise from economic relations between countries. Unlike domestic financial activities, which generally take place within a single currency system, laws, and economic policies, international activities expose companies to a more complex environment. Differences in currency values, interest rates, inflation, tax systems, monetary policies, legal provisions, political conditions, and financial market characteristics between countries can influence a company’s decisions.

In an era of deepening globalization, understanding the global financial system is a crucial foundation for international financial management. This system is not simply a technical mechanism for moving funds between countries, but rather an architecture that connects all global economic activity. As stated by UNCTAD Secretary-General Rebeca Grynspan,”Trade is not just a supply chain, but also a chain of credit lines, payment systems, currency markets, and capital flows” (Widyatmoko et al., n.d.). This chapter will outline the evolution, structure, and crucial role of the global financial system in shaping the dynamics of the world economy.