What are the salient features of foreign exchange market in India?

What are the salient features of foreign exchange market?

The features of the Foreign Exchange Market are as follows:

  • High Liquidity. The foreign exchange market is the most easily liquefiable financial market in the whole world. …
  • Market Transparency. There is much clarity in this market. …
  • Dynamic Market. The foreign exchange market is a dynamic market structure. …
  • Operates 24 Hours.

What are the main functions of foreign exchange market?

The following are the important functions of a foreign exchange market:

  • To transfer finance, purchasing power from one nation to another. …
  • To provide credit for international trade. …
  • To make provision for hedging facilities, i.e., to facilitate buying and selling spot or forward foreign exchange.

What is the structure of foreign exchange market in India?

The foreign exchange market in India consists of 3 segments or tires. The first consists of transactions between the RBI and the authorized dealers (AD). The latter are mostly commercial banks. The second segment is the interbank market in which the AD’s deal with each other.

What are the advantages of foreign exchange market?

Advantages of Foreign Exchange Market in India

  • Globalized marketplace: There are no geographical or localized constraints in foreign exchange market. …
  • Flexibility: …
  • Full transparency: …
  • Wide range of trading options. …
  • Low transaction costs: …
  • No commission: …
  • Market Volatility: …
  • Hi-tech marketplace.
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What are the functions and nature of foreign exchange market?

The foreign exchange market is the place where money denominated in one currency is bought and sold with money denominated in another currency. It is the largest financial market in the world with prices moving and currencies trading somewhere every hour of every business day.