Academic Master

Business and Finance

Multinational Financial Management

For the multinational corporation, it is usually tempting to borrow the money from the economies having low interests. Though it is not an appropriate strategy. This approach forces most of the multinational companies to borrow the money from the countries that are having high-interest rates instead of low-interest rates. There could be various reasons that may explain why these multinational corporations decide to borrow from the economies having high-interest rates, i.e., Brazil (Muralidharan, 2003). First, it could be the level of relative inflation rates that usually affects the decision of borrowing from the higher economies. The economy with high-interest rate typically indicates that the borrower is at the high-rate of risk and makes the lender feel about giving away the money. This concept could be applied to any business and country. In Brazil, the interest rates are higher because of more flexibility in the terms and conditions of the loan (Muralidharan, 2003). However, in Switzerland, the interest rate is comparatively lower, and it attracts more borrowers, but the conditions and terms of the mortgage are not as flexible as in Brazil (Muralidharan, 2003).

The two companies with whom TFC should do business are from Germany and United Kingdom. In Germany, there is a system of Euros and United Kingdom uses the system of pounds (Alcaine, n.d.). In Germany, the rate of interest is lower whereas in the United Kingdom the currency works more per Us dollar (Alcaine, n.d.). Both countries are much established and have a robust currency system. Expanding in the market of either of these countries based on their currency exchange rate and stability would be good for the future of TFC.


Alcaine, E. Multinational financial management. Retrieved 7 March 2018, from

Muralidharan, R. (2003). Environmental Scanning and Strategic Decisions in Multinational

Corporations. Multinational Business Review, 11(1), 67-88.×200300004



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