Presented by :- BHAVIK BHALALA 01. BHAVIK BHALALA

 Markets where money in one currency is exchanged for another currency DEFINITION  Foreign exchange

EEvolution of foreign exchange market in India Indian FX market is originated in 1978 It allow the banks to undertake intra-day trading in FX Exchange rate of the rupee is officially determined by RBI In 1994, unification of the exchange rate of rupee taken place based on the demand and supply in the foreign exchange

MMarket Profile Indian FX market is a transaction based market FX market is made up of authorized dealers, some intermediaries and end users The average turnover of the FX market increased in , when compared to that of PY

DDisclosure and Transparency Initiatives RBI has been transparent in data relating to FX market The movement in FX reserves of the RBI are published in Weekly Statistical Supplement RBI make public half yearly reports on management of FX reserves with the concurrence of govt. of India

FFEDAI Foreign Exchange Dealers Association of india(FEDAI) as a self-regulatory organisation formed by authorized dealers The aim of the FEDAI is to enhance its catalytic role in the market development

IInstitutional development Vast size of the daily FX trading, combined with the global interdependencies of the foreign market involves high risk RBI establish Clearing Corporation of India Limited(CCIL) to mitigate risks in the Indian financial markets CCIL daily settles over 3500 deals covering an average gross volume of around $3.5 billion

CCCIL CCIL,The Clearing Corporation of India Ltd CCIL’s intermediation providers its member benefits such as improved efficiency, lower operational cost etc.. CCIL has improved operational efficiency with zero failure rate CCIL launched a Forex Trading Platform to facilitate US Dollar/Rupee deals by banks of india

 Two Types of Currency Markets 1.Spot Market: Immediate transaction. 2.Forward Market: Transactions take place at a specified future date.

I. SPOT MARKET A market for the immediate purchase and delivery of currencies. II. Spot Exchange Rates Market prices of foreign exchanges in the spot market that are the rates pertaining to the trading of foreign-currency-denominated deposits among major banks in amounts of $1 million and more.  THE SPOT MARKET

 THE FORWARD MARKET Definition of a Forward Contract An agreement between a bank and a customer to deliver a specified amount of currency against another currency at a specified future date and at a fixed exchange rate.

1. Spot Market a. Commercial banks b. Brokers. c. Customers of commercial & central bank 2.Forward Market a. Arbitrageurs b. Traders c. Hedgers d. Speculators

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