Exchange rate fluctuations impact currency invoicing in international trade, study finds.
The article investigates how companies choose which currency to use when trading internationally. By analyzing data from Canadian imports over six years, the study found that when exchange rates are unstable, companies prefer to use the importer's national currency for invoicing. On the other hand, using the exporter's currency or a third currency is less common in these situations. The size of the country also influences the choice of currency for invoicing.