The Foreign Exchange Market
The foreign exchange market is where foreign currencies are bought and sold, facilitating transfer of purchasing power between countries, promoting export/import, and providing hedging facilities. In India, the market has a three-tiered structure involving trading between banks and customers, banks through authorized brokers, and banks abroad.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
FOREIGN EXCHANGE MARKET The market where foreign currencies are bought and sold against domestic currency is called foreign exchange market. In other words, the system where the domestic currency is converted into foreign currency and vice-versa is called as foreign exchange market. Central bank, Commercial banks, Foreign exchange dealers and brokers, etc., deal in foreign currencies. For the regulation of foreign exchange business, a separate legislation is enacted by the central government. The name of that legislation is Foreign Exchange Management Act, 1999 .
FUNCTIONS OF FOREIGN EXCHANGE MARKET 1. To make necessary arrangements for transfer of purchasing power from one country to another. 2. To promote export and import (i.e., foreign trade) by providing adequate credit facilities. 3. To cover foreign exchange risks by providing hedging facilities
FOREIGN EXCHANGE MARKET IN INDIA In India, foreign exchange market has a three tiered structure consisting of the following: 1. Trading between banks and their commercial customers 2. Trading between banks through authorized brokers 3. Trading with banks abroad
