The loanable funds are one of the primary determinants of the real interest rates. The bank uses the deposits made by clients to create loans that are then sought after by the companies that are seeking growth. The bank will, however, charge interest on the loan that is borrowed from it. The real interest rate, therefore, affects the rate at which money grows thereby changing the inflation rate. For a country seeking to invest in other countries, therefore, it is important to compare the interest rates in both the home country and the foreign country and seek to borrow funds in the nation with lower real interest rates.
The United States is known to loan foreign currency a lot of money for them to undertake development projects. The loans are however expected to be paid back with interest that will further be used to boost economic growth in the United States. Once the country experiences increased economic growth, companies in the country will be in a position to achieve strategic plans.
Foreign exchange market, on the other hand, is involved with the national purchasing power, and the international and national credit. It is also through the overseas market that a country can clear its debts and reduce its foreign currency risks. In the case of the United States, the country has put in a lot of effort to ensure that its dollar is superior. This will ensure that companies trading in foreign countries can achieve their international bargain easily and those importing raw materials can do so affordable. This will help firms to make their strategic plans for increased production, increased productivity and increased growth.
For a practical strategic plan to be attained, the government has to put in place specific measures. These measures relate to tariffs, foreign capital, taxes, legislature, and volume limitations. For the countries investment in exports to increase, the government has to make its treasures and dollar attractive for foreign investors to purchase them. With those measures put in place, any company with a strategic plan of venturing into international trade and expanding locally will be in a position to attain it.
To determine whether a strategic plan can be achieved, it is essential to study the current state of the economy and also to forecast the economic state in the years that the strategic plan is hoped to be achieved. The required capital must be available either through the savings made by the organization or through the loanable funds in the country. The trade balance must also present a situation where there is a ready market for the goods produced. The population of the country must also have the purchasing power needed to purchase the product. If these conditions are met, any practical expansionary strategic plan can be achieved.