This project attempt to study the intricacies of the foreign exchange market. The main purpose of this study is to get a better idea and the comprehensive details of foreign exchange risk management. SUB OBJECTIVES
To know about the various concept and technicalities in foreign exchange.
To know the various functions of for ex market.
To get the knowledge about the hedging tools used in foreign exchange.
LIMITATIONS OF THE STUDY
Time constraint.
Resource constraint.
Bias on the part of interviewers.
DATA COLLECTION
The primary data was collected through interviews of professionals and observations.
The secondary data was collected from books, newspapers, other publications and internet.
DATA ANALYSIS
The data analysis was done on the basis of the information available from various sources and brainstorming.
INTRODUCTION
FOREIGN EXCHANGE MARKET OVERVIEW
In today’s world no economy is self sufficient, so there is need for exchange of goods and services amongst the different countries. So in this global village, unlike in the primitive age the exchange of good sand services is no longer carried out on barter basis. Every so foreign country in the world has a currency that is legal tender in its territory and this currency does not act as money outside its boundaries. So whenever a country buys or sells goods and services from or to another country, the residents of two countries have to exchange currencies. So we can imagine that if all countries have the same currency then there is no need for foreign exchange.
Need for Foreign Exchange
Let us consider a case where Indian company exports cotton fabrics toUSA and invoices the goods in US dollar. The American importer will pay the amount in US dollar, as the same is his home