multilateral netting

multilateral netting

an arrangement whereby two or more associated companies offset their receipts and payments with each other, leaving a single net intra-company receipt or payment balance. Multilateral netting is used particularly by MULTINATIONAL ENTERPRISES which operate many overseas subsidiaries trading in different national currencies, in order to simplify the settlement of intra-group indebtedness. Multilateral netting also serves to reduce a company's EXCHANGE RATE EXPOSURE by minimizing the amount of external purchases and sales of foreign currencies.
Full browser ?