1.Introduction 2.Defination 3.Feature and Functions 4.Types 5.Participants

1. Foreign Exchange
Market
Presented By- Jitendrakumar N. Suthar
PROF .RAMKRISHNA MORE ARTS ,COMMERCE &
SCIENCE COLLEGE

2. INTRODUCTION:
•Foreign Exchange Market is Interconnect global online network.
• All International Trade And Monetary Transactions Are Counducted
Through Foreign Exchange.
•Foreign Exchange Market Provides a Feature of Convert/Swap or
Exchange Domestic Currency into Foreign Currency .
• Just Like-
•Forex Market Consider as a Subtype of Commodity Market like Gold
and Silver

3. What Is Foregin Exchange ?
“Foreign Exchange is refer to a value
of a Foregin Currency in Term of Domestic Currency.”
“Foreign Exchange Market is refer to a
systematically Organized market Mechanism Of Buying and
Selling of Foreign Exchange Called as Foreign Exchange
Market”
What is Foreign Exchange Market ?

4. Feature of Foreign Exchange Market :
1. Trading In Multiple Currency.
INR USD GBP EUR JPY
Rupees Dolor Pound Euro Yen
(India) (USA) (UK) (Europe) (Japan)
The United Nations Currently recognizes
180 Currencies That are Used in 195 Country across The
World

5. Feature of Foreign Exchange Market:
2.Its operate 24*7 Worldwide

6. Important Term in Foreign Exchange Market:
• Bid Price – Price of a currency at Fore Dealer Ready to Buy.
• Ask Price –Price of a currency at Forex Dealer Ready to Sell.
• Spread - Different Between Bid Price and Ask Price. It is a
Profit/Margin of Forex Dealer.
• Vehicle Currency- Standard and Internationally accepted
Currency.

7. TYPES :FOREGIN EXCHANGE MARKET
Spot Market
• On the spot transaction
• Immediate Delivery
• On current Market Price
Forward Market
• Agreement for Transaction On
Future Date.
• For Period of 30,60,90,180,360
days.
1$ =70 RS Spot Price
Bid Price/ Ask Price
70.00 /70.50
Spot Price + Swap Basis Point
Bid / Ask + Bid/Ask
70.00 /70.50 + .20/.50

8. PARTICIPANTS IN FOREGIN EXCHANGE MARKET:
Whole seller
Who Buy and Sell Forex in
Bulk which affect The
Demand and Supply
Whole seller
Participants is Price
Maker.
Retailer
Who Buy and Sell Forex
In the Current Market
Price in Retail.
Retail Participants is
Price taker.

9. TYPES OF PARTICIPANTS IN FOREX MARKET:
Whole seller
• Government
• Central Bank
• Commercial Banks
• Company
• Big Corporate Houses
• Overseas Forex Market.
Retailer
• Individual ( Tourist,
Visitor)
• Importer
• Exporter
• Forex Dealer and Broker
• Speculators
• Organization

10. FUNCTIONS OF FOREGIN EXCHANGE MARKET:
FUNCTIONS
Transfer of
Purchasing
Power
Hedging
Functions
Credit
Functions

11. A. Transfer of Purchasing Power
“Purchasing Power is a value of Currency
refer to in term of amount of Goods and Services of one unit of
money can buy.”
It Transfer The Purchasing Power One country To another
Country Through Credit Instruments i.e. Bank transfer ,Foreign
Bill, Bank Draft etc.
Purchasing Power Changes due to-
1.Inflation /Deflation.
2.Different Cost of living.

12. B. Hedging Functions
Dealer Client
Contract
Of Buy/Sell
Currency on
Decided Rate
“Hedging is define as a Risk
management Strategy in Forex
market Which prevent the loss of
Buyer and seller”

13. C. Credit Functions
• Important Functions of Forex Market.
• Its promote Domestic and International Trade.
• Its Provide Credit To Both National and International for
Maximum 3 months.

14. THANK YOU
References:_____________________________________
1. International Finance : Success Publications
2. Wikipedia.org
3. Investopedia.com
4. Thebalance.com
5. Britannica.com