Foreign Exchange
FOREIGN EXCHANGE MARKET
Foreign Exchange – Any currency, other than the local currency, which is used in settling international transactions.
Foreign Exchange Rate - the price for which one currency is exchanged for another
Foreign Exchange Market - are the institutions or systems involved with changing one currency into another.
* Exchange rates are determined on the basis of supply and demand in the foreign exchange market
* Foreign currency dealers provide two quotes: Bid Price: Price at which the dealer is willing to buy foreign currency from you. Ask Price: Price at which the dealer is willing to sell foreign currency to you.
It is always the case that the Ask Price > Bid Price. The difference is the Bid-Ask spread.
The less traded and more volatile a currency, the greater is the spread.
* The role of the BSP in the foreign exchange market is principally to ensure orderly conditions in the market.
Philippine Dealing System (PDS)
• Bankers Association of the Philippines (BAP) member-banks and between these banks and the BSP.
Philippine Dealing and Exchange Corp. (PDEx)
• An electronic platform that most of the BAP-member banks which participate in the peso-dollar trading.
• Official service provider for the USD/PHP spot trading
Some of the BAP Members:
• Allied Banking Corporation
• Banco de Oro-EPCI Inc.
• Bank of Commerce
• Bank of the Philippine Islands (BPI)
• Development Bank of the Philippines (DBP)
• East West Banking Corporation
• Philippine National Bank (PNB)
• Rizal Commercial Banking Corporation (RCBC)
• Security Bank Corporation
• Union Bank of the Philippines
• United Coconut Planters Bank (UCPB)
*Trading through the PDEx allows nearly instantaneous transmission of price information and trade confirmations
*Commercial banks in the Philippines are allowed to engage in spot, outright forward, and swap transactions in Philippine pesos/US dollar and other third currency transactions.
Foreign Exchange – Any currency, other than the local currency, which is used in settling international transactions.
Foreign Exchange Rate - the price for which one currency is exchanged for another
Foreign Exchange Market - are the institutions or systems involved with changing one currency into another.
* Exchange rates are determined on the basis of supply and demand in the foreign exchange market
* Foreign currency dealers provide two quotes: Bid Price: Price at which the dealer is willing to buy foreign currency from you. Ask Price: Price at which the dealer is willing to sell foreign currency to you.
It is always the case that the Ask Price > Bid Price. The difference is the Bid-Ask spread.
The less traded and more volatile a currency, the greater is the spread.
* The role of the BSP in the foreign exchange market is principally to ensure orderly conditions in the market.
Philippine Dealing System (PDS)
• Bankers Association of the Philippines (BAP) member-banks and between these banks and the BSP.
Philippine Dealing and Exchange Corp. (PDEx)
• An electronic platform that most of the BAP-member banks which participate in the peso-dollar trading.
• Official service provider for the USD/PHP spot trading
Some of the BAP Members:
• Allied Banking Corporation
• Banco de Oro-EPCI Inc.
• Bank of Commerce
• Bank of the Philippine Islands (BPI)
• Development Bank of the Philippines (DBP)
• East West Banking Corporation
• Philippine National Bank (PNB)
• Rizal Commercial Banking Corporation (RCBC)
• Security Bank Corporation
• Union Bank of the Philippines
• United Coconut Planters Bank (UCPB)
*Trading through the PDEx allows nearly instantaneous transmission of price information and trade confirmations
*Commercial banks in the Philippines are allowed to engage in spot, outright forward, and swap transactions in Philippine pesos/US dollar and other third currency transactions.