Cash management Systems in Practice ● Multilateral Netting Is an efficient and cost-effective mechanism for settling interaffiliate foreign exchange transactions o Not all countries allow MNCs to net payments By limiting netting, more unnecessary foreign exchange transactions flow through the local banking system McGraw-Hilylrwoin 18-6 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rightsMcGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 18-6 Cash Management Systems in Practice ⚫ Multilateral Netting ◼ Is an efficient and cost-effective mechanism for settling interaffiliate foreign exchange transactions. ⚫ Not all countries allow MNCs to net payments ◼ By limiting netting, more unnecessary foreign exchange transactions flow through the local banking system