Money Market Nd Forex Market
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Money Market Nd Forex Market

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its all about money market and Forex market..pls read it for refernce....

its all about money market and Forex market..pls read it for refernce....

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Money Market Nd Forex Market Presentation Transcript

  • 1. Money Market Presented By:- Atul Banga Laxminarayan Katti Preeti Haridas Meghna Sah Chandan Handique Kishore Modi Nidhi Gupta
  • 2. The Definition
    • As per the RBI “center for dealing mainly of short term character, in money assets; it meets the short term requirement of the borrowers & provides liquidity to the lenders
    • Money market refers to the market for short term assets that are close substitutes of money, usually with maturities of less than a year.
    • It meets the short-term requirements of borrower and provides liquidity or cash to the lenders.
  • 3. The Players - Money Market
    • Reserve Bank of India
    • SBI DFHI Ltd (Amalgamation of Discount & Finance House in India and SBI Gilts in 2004)
    • Commercial Banks, Co-operative Banks and Primary Dealers are allowed to borrow and lend.
    • Specified All-India Financial Institutions, Mutual Funds, and certain specified entities are allowed to access to Call/Notice money market only as lenders
    • Individuals, firms, companies, corporate bodies, trusts and institutions can purchase the treasury bills, CPs and CDs.
  • 4. Instruments of Money Market
    • Certificate of Deposit (C.D.)
    • Commercial Paper (C.P.)
    • Repurchase Agreement
    • Call Money
    • Treasury Bills
  • 5. Certificate of Deposit(C.D.)
    • CDs are short-term borrowings in the form of Usance Promissory Notes having a maturity of not less than 15 days up to a maximum of one year.
    • They are like bank term deposits accounts. Unlike traditional time deposits these are freely negotiable instruments and are often referred to as Negotiable Certificate of Deposits
  • 6. Commercial Paper(C.P.)
    • Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
    • Who can issue Commercial Paper (CP) Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers (SDs) and all-India financial institutions (FIs)
  • 7. Repurchase Agreement
    • It is a transaction in which two parties agree to sell and repurchase the same security. Under such an agreement the seller sells specified securities with an agreement to repurchase the same at a mutually decided future date and a price
    • The Repo/Reverse Repo transaction can only be done at Mumbai between parties approved by RBI and in securities as approved by RBI (Treasury Bills, Central/State Govt securities).
  • 8. Call Money Market
    • The call money market is an integral part of the Indian Money Market, where the day-to-day surplus funds (mostly of banks) are traded. The loans are of short-term duration varying from 1 to 14 days.
    • The money that is lent for one day in this market is known as " Call Money ", and if it exceeds one day (but less than 15 days) it is referred to as " Notice Money ".
  • 9. Treasury Bills
    • Treasury bills, commonly referred to as T-Bills are issued by Government of India against their short term borrowing requirements with maturities ranging between 14 to 364 days.
    • All these are issued at a discount-to-face value. For example a Treasury bill of Rs. 100.00 face value issued for Rs. 91.50 gets redeemed at the end of it's tenure at Rs. 100.00.
  • 10. FOREX :- The Foreign Exchange Market
  • 11. The Foreign Exchange Market
    • The foreign exchange market is the market where the currency of one country is exchanged for the currency of another country. Most currency transactions are channelled through the world-wide interbank market. Interbank market is the wholesale market in which major banks trade with each other.
  • 12. Participants of FOREX MKT
      • Speculators
      • Arbitrageurs
      • Traders
      • Hedgers
  • 13. Foreign Exchange Rates
    • A foreign exchange rate is the price of one currency quoted in terms of another currency
    • Direct quote
    • Indirect quote
    • A cross rate is an exchange rate between the currencies of two countries that are not quoted against each other, but are quoted against one common currency.
  • 14. Foreign Exchange Rates
    • The spot exchange rate is the rate at which a currency can be bought or sold for immediate delivery which is within two business days after the day of the trade.
    • Bid-ask spread is the difference between the bid and ask rates of a currency.
    • The forward exchange rate is the rate that is currently paid for the delivery of a currency at some future date.
    • The forward rate may be at a premium or at a discount.
    • For a direct quote , the annualised forward discount or premium can be calculated as follows:
  • 15. Some reasons to trade in FOREX
    • 24-hour forex trading
    • Superior liquidity
    • 100:1 Leverage in forex trading
    • Lower transaction costs
    • Equal profit potential in both rising and falling markets
  • 16. Some Cautions!!!
    • The market could move against you.
    • You could lose your entire investment. Due to the leverage effect!!
  • 17.
    • Thank You !!!