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Market that facilitated the exchange of currencies- buying and selling.

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Market that facilitated the exchange of currencies- buying and selling. - PowerPoint PPT Presentation


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Foreign Exchange Market. Foreign Exchange Market- Meaning. Foreign Exchange Market is the Market in which the foreign currencies are bought and sold. Here the buyers and sellers include individuals, firms, foreign exchange brokers, commercial banks and central bank.

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Foreign Exchange Market

Foreign Exchange Market- Meaning

Foreign Exchange Market is the Market in which the foreign currencies are bought and sold. Here the buyers and sellers include individuals, firms, foreign exchange brokers, commercial banks and central bank.

  • Market that facilitated the exchange of currencies- buying and selling.
  • Largely an OTC (over the counter) market.
  • Means there is no single market place , organised physically or electronically.
  • Traders sit the offices of major commercial banks all over the world and communicate .
  • The market spans all the time zones and functions literally round the clock.
  • Major centers are London, New York, Hongkong and Tokyo.
slide2

Foreign Exchange Market

Kinds of Foreign Exchange Market

Foreign Exchange

Market

Forward Market

Spot Market

slide3

Foreign Exchange Market

Kinds of Foreign Exchange Market

Foreign Exchange

Market

Forward Market

Spot Market

Sport Market refers to the market

in which the receipts and payments are made immediately. Even the transactions are cleared on the spot , a two day margin is allowed as it takes time to clear the cheque payments.

  • Transactions are conducted for spot

deliveries.

  • Exchange rate is called spot exchange rate.
  • Settlement of transaction in 2 business days.
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Foreign Exchange Market

Kinds of Foreign Exchange Market

Foreign Exchange

Market

Forward Market

Spot Market

Forward Market refers to the

market in which sale and purchase of foreign currency is settled on a specified future date at a rate agreed upon today.

  • Settlements for transactions at a future delivery date.
  • Exchange rate is called forward exchange rate, which is agreed upon today.
  • These transactions are used for hedging or speculative purposes
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