Leads_and_lags
Leads and lags
Expediting or delaying of foreign exchange payments due to an expected change in exchange rates
In international finance, leads and lags refer to the expediting or delaying, respectively, of settlement of payments or receipts in a foreign exchange transaction because of an expected change in exchange rates.[1][2] A change in exchange rates can be a cause of loss (or gain) in international trade, thus the settlement of debts is expedited or delayed in an attempt to minimize the loss or to maximize the gain. In the leads and lags, the premature payment for goods purchased is called a "lead," while the delayed payment is called a "lag."[2]