1 The centralizing of international payments of a group of companies so that payments and receipts in different currencies can be offset, thus reducing transaction and hedging costs.
2 A method of reducing bank charges in which the subsidiaries of a group offset their receipts and payments with each other, usually monthly, resulting in a single net intercompany payment or receipt made by each subsidiary to cover the period concerned. This saves both on transaction costs and paperwork. See also bilateral netting; netting.
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