Trends and Turnover of Currency Market in India

Topics: Foreign exchange market, Currency, Exchange rate Pages: 8 (2363 words) Published: May 3, 2013

Assistant professor, Ph.D Scholar,
Department of commerce, Department of commerce,
Bharathiar University, Bharathiar university,

The foreign exchange market (forex, FX, or currency market) is a global, worldwide-decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. All trade take place in the foreign exchange market involve the buying of one currency and the selling of another currency simultaneously. This is because the value of one currency is determined by its comparison to another currency. The first currency of a currency pair is called the "base currency," while the second currency is called the counter currency. The currency pair shows how much of the counter currency is needed to purchase one unit of the base currency. Currency pairs can be thought of as a single unit that can be bought or sold. When purchasing a currency pair, the base currency is being bought, while the counter currency is being sold. The opposite is true, when the sale of a currency pair takes place. There is appreciation and depreciation of exchange value of currency and it effect the various industry, it has an impact in seller, buyer, trader, government of both buyer and seller country. In this study Trends and Turnover of currency market is taken to find out the current position of foreign exchange.

Keywords: Exchange Value, Foreign Exchange, Appreciation, Depreciation, Currency


The Currency has multiple purposes, including being used as a convenient exchange medium for purchasing products and services. Each nation has a monopoly that gives its government the exclusive right to print its own money. There is one accepted currency within national borders for buying and selling merchandise. Outside of the country, a national currency cannot be used for purchasing products and services. Thus, foreign exchange must occur, which enables each country to buy the currencies of other nations, so they can purchase the products and services of said nation. Trade "between" countries can occur due to foreign currency exchange. The currency market exists primarily to facilitate these transactions, whether it's a giant corporation or a tourist who wants to go shopping while visiting a foreign country. In recent years, the currency market has also become extremely popular with traders who buy and sell currency in hopes of making money from changes in the relative values of currencies. The currency market or foreign exchange market is a global network of banks, currency dealers and other financial institutions. EXCHANGE RATE IN INDIA

Exchange rate stability is an important indicator of a country’s economic strength. Consistent fall or fluctuation in exchange rate adversely affects the balance of payments of the country. India in the past has mostly been a closed economy, following protectionist policies of development. Foreign exchange management and control has been an important tool of lending protection to the domestic economy, checking capital flight, maintaining a comfortable reserve of valuable foreign exchange for development needs and import of essential goods and encouraging exports. To attain these...
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