This ppt includes Participants in foreign exchange market

1. PRESENTED BY
Radhika H R
2nd M.Com
G F G C W Holenarsipura
Participants in foreign
exchange market
Under the guidance of
Sundar B. N.
Asst. Prof. & Course Co-ordinator
GFGCW, PG Studies in Commerce
Holenarasipura

2. PARTICIPANTS IN FOREIGN EXCHANGE
MARKET
• Introduction
The foreign exchange market also called forex or currency
market was one of the original financial markets formed to bring
structure to the burgeoning global economy in terms of trading
values, it is by for the largest financial market in the world. Aside
from providing a venue for the buying selling exchanging and
speculation of currencies the forex market also enables currency
conversion for international trade settlement and investment.

3. MEANING OF FOREIGN EXCHANGE MARKET
The foreign exchange market is a market where the buyers
and sellers are involved in the sale and purchases of foreign
currencies in other words a market where the currencies of
different countries are bought and sold is called a foreign
exchange market.

4. Commercial bank
Foreign exchange brokers
Central Bank
MNCs
Individual and small business
Hedgers
Individuals
PARTICIPANTS OF FOREIGN
EXCHANGE MARKET

6. The major participants in the foreign exchange market
are the large commercial banks who provide the core of
market as many as 100 to 200 banks across the global
activity “market the market” in the foreign exchange
these banks customers in conducting foreign commerce
or making international investment in financial assets
that require foreign exchange.
1.COMMERCIAL BANK

8. Foreign exchange brokers also operate in the
international currency market they act agents
who facilities trading between dealers unlike the
banks, brokers serve merely as matchmakers
and do not put their own money at risk.
2. Foreign exchange Brokers

10. Another important players in the foreign market is central bank of
the various countries central banks frequently intervene in the
market to maintain the exchange rates of their currencies within a
desired range and to smooth fluctuations with in that range the
level of the banks intervention will depend upon the exchange rate
regime flowed by the given country’s central bank.
3.Central Bank

12. MNCs are the major non bank participants in the forward market as they
exchange cash flows associated with their multinational operations.
MNCs often contract to their either pay or receive fixed amounts in foreign
currencies at future dates so they are exposed to foreign currency risk. This is why
they often hedge these future cash flows through the inter-bank forward
exchange market.
4.MNCS

13. Individual and small business also use foreign exchange market to
facilitate execution of commercial or investment transactions. The
foreign needs of these players are usually small and account for only a
fraction of all foreign exchange transactions. Even then they are very
important participants in the market to hedge foreign exchange risk.
5.INDIVIDUAL AND SMALL BUSINESS

14. Individual realize a wide range of non-trade transaction in the sphere
of foreign tourism transfers of salaries, pensions, royalties buying and
selling of cash with the introduction of margin trading individuals have
received an opportunity to invest free funds in the forex market with
the aim to make profit.
6.INDIVIDUAL

15. There are many businesses which end up creating
an asset or liability priced in foreign currency in the
regular course of their business for instance
importers and exporters engaged in foreign in trade
may have open positions in several foreign
currencies they many therefore be impacted if
these is a fluctuation in the value of foreign
currency as a result to protect them selves against
these losses hedgers take opposite position in the
7.HEDGERS

16. CONCLUSION
• One of the most unique point of the forex market is that it is comprised of a global network
of financial centres that transact 24 hours a day closing only on the weekend.
• As one major forex hub closes another hub in a different part of the world remains open
for business this increases the liquidity available in currency market which adds to its
appeal as the largest assets class available to investors