Submitted To:- Submitted By:-

Mr. Chetan Sharma Miss. Shinu Gupta

(Asst. prof.) MBA III SEM
Meaning &definition of
Foreign Exchange Market
• The Foreign exchange (currency or forex or
FX)market refers to the market for currencies.
Transaction in this market typically involve one party
purchasing a quantity of one currency in exchange for
paying a quantity of another. The FX market is the
largest and most liquid financial market in the world,
and includes trading between large banks, central
banks, currency speculators, corporations,
governments, and other institutions.
According to Kindleberger,
“The Foreign Exchange Market is a place where foreign
moneys are bought and sold”. Foreign exchange market is
an institutional arrangement for buying and selling of
foreign currencies. Exporters sell the foreign currencies.
Importers buy them.
Characteristics
Electronic Market
Geographical Dispersal
Transfer of Purchasing Power
Intermediary
Volume
Provision of Credit
 Minimizing Risks
Structure of Foreign Exchange Market
1. Retail Marketing
2. Wholesale Market
a) Inter-Bank Market
i. Direct Market
ii. Indirect Market
a) Central Banks
 Functions

Transfer
Credit function Hedging function
function
 Affected Factors

Market
Economic Political Psycholog
Factors Condition y
Methods of Affecting International Payments

Foreign Docume
Cheque Bill Of
Telegraphi Mail and Bank ntary
c Transfer Transfer Exchang Credit
Drafts e
 Participants in Foreign Exchange Market

Foreign
Retail Commercial Central
Exchange
Clients Banks Banks
Brokers