Abstract
Despite the extensive application of economic order quantity (EOQ) type models to "domestic" cash management problems by Baurnol(1952) and Miller and Orr (1966, 1968). "international" finance researchers haven't yet applied these models to international cash management. This paper attempts to bridge this literature gap by proposing a practical EOQ-based model that would help determine the optimal holding of a foreign currency. The proposed model can be utilized by foreign exchange dealers, multinational corporations, and offshore banking units including U.S. International Banking Facilities (IBFs), Canadian International Banking Centers (IBCs), and international tax havens.