Banking Project on Currency Fluctuations
IBS HYDERABAD
BANKING MANAGEMENT PROJECT ON: CURRENCY FLUCTUATIONS & ITS IMPLICATIONS ON INDIAN BANKS
SUBMITTED BY: PIYUSH SULTANIA 11BSPHH010580 IBS HYDERABAD
Table of Contents
INTRODUCTION: WHAT IS CURRENCY ..................................................................................................... 3 REASONS FOR FLUCTUATION .................................................................................................................. 3 IMPACT OF RECESSSION IN INDIAN ECONOMY ....................................................................................... 7 FOREIGN EXCHANGE MARKET ................................................................................................................ 9 CURRENCY FLUCTUATION IN INDIAN RUPEE ......................................................................................... 10 FACTORS RESPONSIBLE FOR APPRECIATION OF RUPEE ......................................................................... 11 CURRENCY FLUCTAUTION IMPLICATIONS ON INDIAN BANK…………………………………………………………….. 16 RBI’S ROLE IN CURRENCY FLUCTAUTION……………………………………………………………………………………………22 HOW TO HEDGE CURRENCY RISK……………………………………………………………………………………………………….24 REFERENCES………………………………………………………………………………………………………………………………………28 APPENDIX………………………………………………………………………………………………………………………………………….29
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WHAT IS CURRENCY?
Currency is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Currency is used as a medium of exchange for goods and services; currency is the basis for trade.
The Indian rupee (sign: ; code: INR) is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India. The modern rupee is subdivided into 100 paise (singular paisa), although this division is now theoretical; as of 30 June 2011, coin denominations of less than 50 paise ceased to be legal tender. Banknotes are available in
BANKING MANAGEMENT PROJECT ON: CURRENCY FLUCTUATIONS & ITS IMPLICATIONS ON INDIAN BANKS
SUBMITTED BY: PIYUSH SULTANIA 11BSPHH010580 IBS HYDERABAD
Table of Contents
INTRODUCTION: WHAT IS CURRENCY ..................................................................................................... 3 REASONS FOR FLUCTUATION .................................................................................................................. 3 IMPACT OF RECESSSION IN INDIAN ECONOMY ....................................................................................... 7 FOREIGN EXCHANGE MARKET ................................................................................................................ 9 CURRENCY FLUCTUATION IN INDIAN RUPEE ......................................................................................... 10 FACTORS RESPONSIBLE FOR APPRECIATION OF RUPEE ......................................................................... 11 CURRENCY FLUCTAUTION IMPLICATIONS ON INDIAN BANK…………………………………………………………….. 16 RBI’S ROLE IN CURRENCY FLUCTAUTION……………………………………………………………………………………………22 HOW TO HEDGE CURRENCY RISK……………………………………………………………………………………………………….24 REFERENCES………………………………………………………………………………………………………………………………………28 APPENDIX………………………………………………………………………………………………………………………………………….29
Page
2
WHAT IS CURRENCY?
Currency is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Currency is used as a medium of exchange for goods and services; currency is the basis for trade.
The Indian rupee (sign: ; code: INR) is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India. The modern rupee is subdivided into 100 paise (singular paisa), although this division is now theoretical; as of 30 June 2011, coin denominations of less than 50 paise ceased to be legal tender. Banknotes are available in