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Sumeet N. Chaudhari (FT-26) Foreign Exchange Market in India
Sumeet N. Chaudhari (FT-26) Foreign Exchange Market in India
FEATURES The foreign exchange market or the forex market is characterized by:
Huge trading volumes 24 hour tradingGeographical Diversity Liquidity Large variety and number of traders
PARTICIPANTS IN FOREIGN EXCHANGE MARKET Customers:-The customers who are engaged in foreign trade participate in foreign exchange market by availing of the services of banks.
Commercial Banks:-They are most active players in the foreign exchange market. Commercial bank dealing with international transaction offer services for conversion of one currency in to another. They have wide network of branches. Central Banks:-In all countries Central bank have been charged with the responsibility of maintaining the external value of the domestic currency. Generally this is achieved by the intervention of the bank. Exchange Brokers:-foreign exchange brokers play very important role in the foreign exchange market. However the extent to which services of foreign brokers are utilized depends on the tradition and practice prevailing at a particular foreign exchange market center. Overseas FOREX Market:-Today the daily global turnover is estimated to be more than US $ 1.5 trillion a day. The international trade however constitutes hardly 5 to 7 % of this total turnover. The rest of trading in world foreign exchange market is constituted of financial transaction and speculation. Speculators:-The speculators are the major players in the foreign exchange market.