ABSTRACT
This chapter examines the relationship between international finance and international leasing with a special focus on the international finance environment, the foreign exchange market and hedge strategies. The changing financial environment, according to D. R. Lessard, represents in four aspects: increased international linkage of financial markets, increased financial intervention in domestic economies, exchange and interest rate instability, and resulting threats and opportunities. The International Finance Corp, an agency of the World Bank has played an important part in introducing leasing to the less developed countries since its first investment in a leasing company in 1977. International financial transactions that have effects on the performance and behaviour of national economies, as well as on the decisions and welfare of firms and individuals, take place in the foreign exchange market. International financial theories have already explained the relationships between the spot exchange rates, forward exchange rates, interest rates and inflation rates.
