Saturday, July 28, 2012

Functions Of Foreign Exchange Market

The basic and primary function of exchange market is for the transfer of purchasing power between countries. The transfer is by TT, MT, draft, bills, credit cards, etc. The foreign exchange is the most important and most effective purchasing power between the two parties held in different countries.

There are another function of exchange market in the country. The main function and main foreign exchange market is the money from one country to another country money. The second objective of exchange for the security risk. What are the results of exchange rate changes constantly. If every tourist goes to another country for any purpose, it should be his motto in the currency of the country where it needs money to change the various function of exchange market. The exchange rate is the phenomenon that a country's currency in the currency of another country is carried out. Thus, the effect is the country in many respects.

A foreign exchange market is a place which is foreign exchange transactions take place. In other words, there is a market where foreign funds are bought and sold.

Exporters claim the points for importers on their bankers. Currency hedging market assumes the role as regards the risks of foreign exchange. There are frequent fluctuations in exchange rates. To reduce the risk that the market for foreign currency hedging or actual damages caused by futures contracts in exchange for these fluctuations. Agencies of foreign currency to pay foreign currency at a fixed interest rate. Exchange offices bear the risks of fluctuations in exchange rates.

No comments:

Post a Comment