Two methods companies can use to finance international trade are obtaining financing from their own bank or keeping currencies on hand. Maintaining a portfolio of currencies has advantages like diversification but also risks from currency fluctuations. Companies can finance transactions through their bank by taking out loans denominated in foreign currencies. They can also hold marketable securities like foreign currency deposits. Interest rate parity and exchange rate forecasting methods affect short-term financing by influencing expectations of currency values over time, impacting decisions about currency hedging or borrowing in certain currencies.