If an overseas subsidiary can borrow from the local markets, the ability to pay back in local currencies can be a drawback.

Question

Quizplus · Accepted Answer

Borrowing in local currencies can actually be beneficial for an overseas subsidiary because it reduces the risk associated with currency exchange fluctuations. This means the subsidiary can plan its finances more effectively without worrying about the impact of currency value changes on its repayment obligations.

If an Overseas Subsidiary Can Borrow from the Local Markets