Foreign Exchange Market (FOREX) - Meaning .pptx

Foreign Exchange Market (FOREX) - Meaning, Features

1. Foreign Exchange - Forex 1

2. Meaning of Forex Foreign Exchange (FOREX) refers to the foreign exchange market. It is the over-the-counter market in which the foreign currencies of the world are traded. It is considered the largest and most liquid market in the world. The value of any particular currency is determined by market forces related to trade, investment, tourism, and geo-political risk. Foreign exchange is handled globally between banks and all transactions fall under the auspice of the Bank for International Settlements (BIS). 2

3. Foreign Exchange Market Meaning: Foreign exchange market is a market for buying and selling of foreign currencies. It is a global online network where currencies of different countries are bought and sold. The foreign exchange market determines the exchange rate for currencies around the world. This market is also termed as Currency, FX or forex market. Its structure comprises of individuals, firms, commercial banks, the central banks, importers and exporters, investors, brokers, immigrants, tourists. The foreign exchange market is a system and do not have any physical location. 3

4. Features of Forex Market High liquidity Market transparency Dynamic market Operates 24 hours Lower trading Cost Dollar most Widely Traded 4

5. Functions of Foreign Exchange Market 5

6. Participants in Forex Market The Main Participants in Foreign Exchange Markets are: Authorized Dealers Financial Institutions Exchange Brokers Central Banks Hedgers Speculators Arbitrageurs Business firm Commercial Banks 6