ព្រះរាជាណាចក្រកម្ពជា

ុ
ជាតិ សាសនា ព្រះមហាក្សត្រ

3
សាកលវិទ្យាលយ
័ ភូមន
ិ ្ទនីតសា
ិ ស្ត្រ
និងវិទ្យាសាស្ត្រសេដ្ឋកិច្ច
ថ្នា ក់ក្រោយបរ ិញ្ញា បត្រ

ការសង្ខេបខ្លឹមសារមេរៀនពីនិស្ស ិតថ្នា ក់ MBF16.1B

មុខវិជ្ជា ៖ គ្រប់គ្រងហិរញ្ញ វត្ថុអន្តរជាតិ (International Financial Managment)

សាស្ត្រា ចារ្យ៖ ឈាង ហ៊ុយ

សប្តា ហ៍ទី២ កាលបរ ិច្ឆេទ៖ ១៣ មិថុនា ២០២០ម៉ោ ង ១៥៖៣០ ដល់ ១៨៖០០

នស
ិ ្សត
ិ “ឆុង កុសល”
ខ្លម
ឹ សារនៃការសង្ខេបមេរៀន៖ International Financial Markets

Foreign Exchange Market

1- Allows for the exchange of one currency for another.

2- Exchange rate specifies the rate at which one currency can be exchanged for
another.

Foreign Exchange Transactions

1. The over-the-counter market is the telecommunications network where

companies normally exchange one currency for another.
2. Foreign exchange dealers serve as intermediaries in the foreign exchange
market
3. A foreign exchange transaction for immediate exchange is said to trade in the
spot market. The exchange rate in the spot market is the spot rate.
4. Trading between banks occurs in the interbank market.
Spot Market

1- The U.S. Dollar is the commonly accepted medium of exchange in the spot
market.
2- Spot market time zones - Foreign exchange trading is conducted only during
normal business hours in a given location. Thus, at any given time on a
weekday, somewhere around the world a bank is open and ready to
accommodate foreign exchange requests.
3- Spot market liquidity: More buyers and sellers means more liquidity.

Attributes of Banks That Provide Foreign Exchange

1- Competitiveness of quote
2- Special relationship with the bank
3- Speed of execution
4- Advice about current market conditions
5- Forecasting advice

Foreign Exchange Quotations

1- At any given point in time, a bank’s bid (buy) quote for a foreign currency will
be less than its ask (sell) quote.
2- The bid/ask spread covers the bank’s cost of conducting foreign exchange
transactions

Factors That Affect the Spread

1- Order costs: Costs of processing orders, including clearing costs and the costs
of recording transactions.
2- Inventory costs: Costs of maintaining an inventory of a particular currency.
3- Competition: The more intense the competition, the smaller the spread quoted
by intermediaries.
4- Volume: Currencies that have a large trading volume are more liquid because
there are numerous buyers and sellers at any given time.
 5- Currency risk: Economic or political conditions that cause the demand for and
supply of the currency to change abruptly.

Interpreting Foreign Exchange Quotations

1- Direct Quotation represents the value of a foreign currency in dollars (number

of dollars per currency).

Example: $1.40 per Euro

2- Indirect quotation represents the number of units of a foreign currency per

dollar.

Example: €0.7143 per Dollar

Indirect quotation = 1 / Direct quotation

Interpreting Changes in Exchange Rates

1- When the euro is appreciating against the dollar (based on an upward

movement of the direct exchange rate of the euro), the indirect exchange rate
of the euro is declining.
2- When the euro is depreciating (based on a downward movement of the direct
exchange rate) against the dollar, the indirect exchange rate is rising.

Cross Exchange Rates

1- Cross exchange rate is the amount of one foreign currency per unit of another
foreign currency
2- Example

Value of peso = $0.07

Value of Canadian dollar = $0.70

Value of peso in C$ = Value of peso in $ / Value of C$ in $

= $0.07 / $0.70 = C$ 0.10