FUNCTIONS OF FOREIGN EXCHANGE MARKET

abhishreshthaa

New member
In a business setting, there is a fundamental difference between making payment in the domestic market and making payment abroad. In a domestic transaction, only one currency is used while in a foreign transaction, two or more currencies maybe used.


The foreign exchange market is the market in which currencies are brought and sold against each other it is the largest market in the world.


The foreign exchange market also known, as forex market is an over-the-counter market, this means that there is no single market place or an organized exchange like a stock exchange. The traders sit in the foreign exchange dealing room of major commercial banks around the world, they communicate with each other through telephone telex computer terminals and other electronic menace of communication.


They are four main participants in the foreign exchange market.
1. Broker

2. Bankers

3. Corporations

4. Central bank.

Bankers: large commercial banks operating either at retail level for individual exporters and corporations or at wholesale level in the InterBank market.


Central bank: central banks of various countries that intervene in order to maintain or to influence the exchange rate of their currencies within a certain range as also to execute the orders of government.


Individual brokers or corporations: bank dealers often used brokers to stay anonymous since the identity of banks can influence short-term course.
 

rosemarry2

MP Guru
In a business setting, there is a fundamental difference between making payment in the domestic market and making payment abroad. In a domestic transaction, only one currency is used while in a foreign transaction, two or more currencies maybe used.


The foreign exchange market is the market in which currencies are brought and sold against each other it is the largest market in the world.


The foreign exchange market also known, as forex market is an over-the-counter market, this means that there is no single market place or an organized exchange like a stock exchange. The traders sit in the foreign exchange dealing room of major commercial banks around the world, they communicate with each other through telephone telex computer terminals and other electronic menace of communication.


They are four main participants in the foreign exchange market.
1. Broker

2. Bankers

3. Corporations

4. Central bank.

Bankers: large commercial banks operating either at retail level for individual exporters and corporations or at wholesale level in the InterBank market.


Central bank: central banks of various countries that intervene in order to maintain or to influence the exchange rate of their currencies within a certain range as also to execute the orders of government.


Individual brokers or corporations: bank dealers often used brokers to stay anonymous since the identity of banks can influence short-term course.

Hey dear,

Please check attachment for Research Study on Foreign exchange market structure, players and evolution, so please download and check it.
 

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