FOREIGN EXCHANGE MARKET IN INDIA

foreign exchange market also called forex market. its a market where one currency are quoted in terms of other currency . as we know no one even USA can not live without exporting or importing. and currently US dollar in the dominant currency in the world so according to India point of view its convert the INR (Indian rupees ) in terms of US dollar to make the payment of foreign exporters.


for example if 1USD = 50 INR that mean Indian currency are quoted in dollar if you want buy 1 USD you have to 50 Indian rupees.
forex market in the largest market in the world.

in India foreign exchange market are classifying into:

1. wholesale market
2. retail market

again wholesale market are divided into-

1. giant transaction layer
2. other transaction layer

1. giant transaction layer: in this layer major commercial banks are deal for their customer as well as for them selves.
they keep inventory of many currency in order to make profit in future if their price go up. but currency rate are subject to fluctuation so they keep track record on market. sometime thay also called money makers.

2. other transaction layer: like wise giant transaction layer it involves small commercial banks but their transaction are very small compare to giant transaction layer. sometime they also called interbank segment



2. reatil market: retail market includes tourist from abroad , traveler cheque and money receive from abroad. their amount are very small compare to wholesale market



STRUCTURE OF FOREIGN EXCHANGE MARKET IN INDIA

divided in 3 segment


1. first include reserve bank of India and financial institution like icici bank , idbi or ifci. they are also called authorized dealer.

2. second segment include commercial bank and financial institution this are also called interbank segment.

3 third layer includes commercial banks and corporate sector .


Brijesh Mishra

brijeshmishra49@gmail.com