Indian Forex Market

ASSIGNMENT ON

Financial Institution Financial Market & Product

TOPIC: Implication of Indian Foreign Exchange Market Policy

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SUBMITTED TO

Prof. Debabrata Das

DEPTT. OF BUSINESS ADMINISTRATION

SUBMITTED BY

Amitabh Dey ( BPT09023)

Foreign Exchange ( FOREX)

Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's currency is valued according to factors of supply and demand.  In other words, a currency's value can be pegged to another country's currency, such as the U.S. dollar, or even to a basket of currencies. A country's currency value also may be fixed by the country's government. However, most countries float their currencies freely against those of other countries, which keeps them in constant fluctuation.

Need for FOREX

The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business' income is in US dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation on the change in interest rates in two currencies.

Forex Market

The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. It is an over-the-counter market where buyers and sellers conduct foreign exchange transactions. This means that there is no single physical or electronic market place or an organized exchange with a central trading clearing mechanism, where traders meet and exchange currencies. The market is actually a worldwide network of inter-bank traders, consisting of banks, connected by telephone lines and computers. With direct dialing telephone services anywhere in the world, foreign exchange markets have become truly global in the sense that currency transactions now require only single...