Note on foreign exchange market in india

note on foreign exchange market in india

FCA occur mainly on account of purchases and sales of foreign exchange by RBI in the foreign exchange market in India. Bulk trading of the convertible currencies takes place against the US dollar. These bank maintain account with each other for facilitating settlement of transactions. RTP refers to the Reserve Tranche Position in the IMR. So, the strong trend in the foreign exchange market offered an attractive alternative to stocks and bonds. Hence, banks enter into correspondent banking relationship with other banks.

The Authorized Dealers (Authorized by the RBI) and the accredited brokers are eligible to participate in the foreign Exchange market in India. It includes banks, specialised foreign exchange dealers, brokers and official government agencies through which the currency of one country can be exchanged (converted) for that of another country. After independence, fera was introduced as a temporary measure to regulate the inflow of the foreign capital.

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Foreign Exchange Rate: The rate at which currency of one country can be exchanged for currency of another country is called the Rate of Foreign Exchange. As returns on stocks and bonds waned, investors found currency strategies to be quite profitable over the 2001 to 2004 period. Due to continuing integration of the global financial markets and increased pace of deregulation, the role of self-regulatory organisations like fedai plays a catalytic role for smooth functioning of the markets through closer coordination with the RBI, other organisations like fimmda, the Forex Association. quot;s are expressed in units of US 1 per" currency. On a normal business day the trader expects to buy and sell roughly equal amounts of pounds/dollars. Since 2001, clearing and settlement functions in the foreign exchange market are largely carried out by the Clearing Corporation of India Limited (ccil) that handles transactions of approximately.5 billion US dollars a day, about 80 of the total transactions. The restrictions on a number of other current account transactions were relaxed. Project Report on the Interbank Dealing and Dealing Room Operations. This enables them to do deals very rapidly.