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    What Is Foreign Exchange

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    vmktpt
    The document discusses foreign exchange and the foreign exchange market. It defines foreign exchange as money other than the domestic currency that is exchanged or traded between countries. The foreign exchange market is the largest market in the world with daily turnover of $5.3-6.6 trillion. The market has no physical presence and operates 24 hours a day as it connects global financial centers. Major participants include central banks, commercial banks, and corporations that trade currencies for international trade and financial transactions.

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    What Is Foreign Exchange

    Uploaded by

    vmktpt
    125 views4 pages
    The document discusses foreign exchange and the foreign exchange market. It defines foreign exchange as money other than the domestic currency that is exchanged or traded between countries. The foreign exchange market is the largest market in the world with daily turnover of $5.3-6.6 trillion. The market has no physical presence and operates 24 hours a day as it connects global financial centers. Major participants include central banks, commercial banks, and corporations that trade currencies for international trade and financial transactions.

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    FOREX MARKET

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    What is Foreign Exchange

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    The document discusses foreign exchange and the foreign exchange market. It defines foreign exchange as money other than the domestic currency that is exchanged or traded between countries. The foreign exchange market is the largest market in the world with daily turnover of $5.3-6.6 trillion. The market has no physical presence and operates 24 hours a day as it connects global financial centers. Major participants include central banks, commercial banks, and corporations that trade currencies for international trade and financial transactions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    125 views4 pages

    What Is Foreign Exchange

    Uploaded by

    vmktpt
    The document discusses foreign exchange and the foreign exchange market. It defines foreign exchange as money other than the domestic currency that is exchanged or traded between countries. The foreign exchange market is the largest market in the world with daily turnover of $5.3-6.6 trillion. The market has no physical presence and operates 24 hours a day as it connects global financial centers. Major participants include central banks, commercial banks, and corporations that trade currencies for international trade and financial transactions.

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    What is Foreign Exchange ?

    In narrow terms, Forex simply means foreign currency or money other than the domestic currency or money In Broader Terms, Forex Means Study of all the currencies of the different countries How they are exchanged or traded with each other Exchange rates and how they are set The Exchange markets The Participants Foreign Exchange Market-World View Globally, operations in the foreign exchange market started in a major way after the breakdown of the Bretton Woods system in 1971, which also marked the beginning of floating exchange rate regimes in se eral countries! " er the years, the foreign exchange market has emerged as the largest market in the world! The decade of the #$$%s witnessed a perceptible policy shift in many emerging markets towards reorientation of their financial markets in terms of new prod cts and instr ments, de elopment of institutional and market infrastructure and realignment of regulatory structure consistent with the liberalised operational framework! Foreign Exchange Market in !ndia The changing contours were mirrored in a rapid expansion of foreign exchange market in terms of participants, transaction "ol mes# decline in transaction costs and more e$$icient mechanisms o$ risk trans$er! The origin of the foreign exchange market in &ndia could be traced to the year 197% when banks in &ndia were permitted to undertake intra'day trade in foreign exchange! Howe er, it was in the 199&s that the &ndian foreign exchange market witnessed far reaching changes along with the shifts in the currency regime in &ndia!

    F'E'(')'! Foreign Exchange (ealer*s )ssociation o$ !ndia ()E*+&, was set up in #$-. as an +ssociation of banks dealing in foreign exchange in &ndia (typically called +uthori/ed *ealers ' +*s, as a self regulatory body and is incorporated under Section 0- of The 1ompanies +ct, #$-2! &t3s major acti ities include framing of rules go erning the conduct of inter'bank foreign exchange business among banks is'4' is public and liaison with 56& for reforms and de elopment of )orex market!

    F nctions o$ F'E'(')'!
    7 7 7 7 7 7 7 7 Guidelines and rules for the forex business Training of bank personnel in the areas of )orex business +ccreditation of brokers +d ising 8 +ssisting member banks in settling issues, matters in their dealings 5epresent member banks on Go t, 5!6!&! and other bodies +nnouncement of daily and periodical rates to member banks Prescribing margin for calculating exchange rates for arious merchant transactions )ormulating code of conduct for dealers working in banks exchange brokers for dealing between each other

    Mem+ers o$ F'E'(')'!' 7 Public and pri ate sector banks 7 )oreign banks 7 1o'operati e banks 7 )inancial institutions such as E9&: bank, &!*!6!&!,&!)!1!&! and S!&!*!6!&! and others such as Thomas 1ook (&, ;td! 7 +s on May 2008 )!E!*!+!&! has 89 members

    Forex Market - Feat res 7 The :arket Has <o Physical Presence! 7 &t &s The ;argest :arket "n The Planet = Earth >! 7 &t &s :ostly Speculati e &n <ature! 7 &t &s + 0? @ Hour :arket! Some <ew Aork banks maintain 0 shifts (one arri ing at office at B am when ;ondon and )rankfurt are open,! ;arge <ew Aork banks also ha e branches in Tokyo, )rankfurt, and ;ondon! Thus, they are in contact with all financial centers 0? hours! *aily Turn " er @ 0!C- To B!%% Trillion *ollar Per *ay Forex Market - Feat res &t &s + :arket 1onnected 6y +d anced 1ommunication 1hannels ;ike S!D!&!)!T! &t &s +n Extremely +cti e +nd +lso +n Enpredictable :arket! The :arket &s Truly Global +s Trades Take Place +cross 1ontinents! 7 :ost *eals +re "n Spot 6asis! 7 The :arket &s *eep, ;iFuid +nd Efficient! 7 *eals +re Screen 6ased! 7 :arket &s Golatile 6ecause "f )loating <ature "f

    Exchange 5ates Foreign Exchange Market Interbank Market-Whole sale Market 1entral 6anks, 1ommercial 6anks, )inancial &nstitutions H 1orporate (Enion States, The + erage ;ot Si/e ' ES* # ' - :n &ndian ;ot Si/e ' ES* %!0- @ #!% :n Retail Market Tourists &ndi idual needs )orex in the form of T1, *rafts &mporter Exporters The amount is small in this market

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