Premium Essay

Forex

In: Business and Management

Submitted By saumeya
Words 1079
Pages 5
If India can fast utilise currency flows for long-term projects, the regulatory regime could be more liberal, says Jaimini Bhagwati.
In the aftermath of the financial crisis of 2008, several orthodoxies - such as efficient markets, inflation targeting and central bank independence - are being reviewed.
Even the International Monetary Fund (IMF) and the World Bank have revised their views and conceded that capital controls may be necessary at times.
However, for the ideologically blinkered in India, capital account controls in any form are synonymous with "licence and permit raj".
Given the size of India's outstanding stock of internal public debt and projected budget deficits, there are limitations to which the government/public sector can access funds domestically.
This would suggest that India should welcome all forms of capital inflows to plug its funding gaps. However, if foreign capital flows into India are more than its current account deficit, the excess gets added to its forex (FX) reserves, which are warehoused in low interest rate bearing government securities of triple A developed countries.
The governor of the Reserve Bank of India (RBI) mentioned at a conference in Zurich on May 11, 2010 that "problems arise when the (capital) flows are largely in excess of the economy's absorptive capacity".
This article examines available options and corresponding logic to increase or restrict capital inflows against the irony of India having to lend its FX reserves to governments of countries with much higher per capita income.
First, a few numbers. As of December 31, 2009, India's FX reserves stood at $283.5 billion. On the same date, total external debt amounted to $251.4 billion, of which long-term debt with remaining maturities of more than a year added up to $206.2 billion.
Out of this long-term debt component, external commercial borrowings (ECBs) stood...

Similar Documents

Premium Essay

Forex

...INDIAN INSTITUTE OF PLANNING AND MANAGEMENT BANGALORE FINANCIAL MANAGEMENT PROJECT REPORT ON STUDY OF FOREX MARKET IN INDIA AND COMAPARATIVE STUDY OF FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS WITH RESPECT TO HARVEST FUTURES CONSULTANTS INDIA Pvt Ltd. Submitted in partial fulfillment of requirements for the degree of Masters of Business Administration (2010-2012) affiliated to IIPM, BANGALORE Under the guidance of Prof. ZAKARIA SUBMITTED BY ABHISHEK JAIN – F10A165, DINESH REDDY F V – F09BB05, B G HARI NATH REDDY- F10A157, HARISH NAGARAJ – F10A106, RISHI KUMAR BHARGAVA – F10A134, VENKATA SWARUP KUMAR – F10A110. CERTIFICATE FROM THE GUIDE This is to certify that the project work titled “STUDY ON FOREX MARKET IN INDIA & COMPARATIVE STUDY OF FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS WITH RELEVANCE TO FOREX MARKET WITH RESPECT TO HARVEST FUTURES CONSULTANTS INDIA Pvt Ltd”, is a bonafide work of ABHISHEK JAIN, DINESH REDDY, HARI NATH REDDY, HARISH NAGARAJ, RISHI KUMAR BHARGAVA, VENKATA SWARUP KUMAR carried the partial fulfillment for the award of degree MASTER OF BUSINESS ADMINISTRATION of INDIAN INSTITUTE OF PLANNING & MANAGEMENT under my guidance. This project work is original and not submitted earlier for the award of any degree of any other University/Institution. Signature of Guide Name of the guide ZAKARIA, IIPM ACKNOWLEDGEMENT We would like to express our profound gratitude to all those who have been instrumental in the preparation of this project......

Words: 13683 - Pages: 55

Free Essay

Forex

...TRADING TECHNIQUES Nani Desu Ka?* Using The Heikin Ashi Technique Enter and stay on the right side of the trend — or when in doubt, stay out — with this Japanese charting technique. ince the introduction of the candlestick method to the US some two decades ago, it caused a revolution in perceiving how the bullish and bearish forces perform in the Western markets. It has become a popular charting tool, as traders have used candlesticks to make chart formations easier to spot and name. But interpreting candlesticks can be challenging. To make things easier, the heikin-ashi technique modifies the traditional candlestick chart. Let's take a look at how it works. BALANCING ON ONE FOOT them as candlesticks. The modified values are computed using these definitions: • haClose = (O+H+L+C)/4 • haOpen = (haOpen (previous bar) + haClose (previous bar))/2 • haHigh = Maximum(H, haOpen, haClose) • haLow = Minimum(L, haOpen, haClose) The heikin-ashi method {heikin means "average" or "balance" in Japanese, while ashi means "foot" or "bar") is a visual technique that eliminates irregularities from a normal chart, offering a better picture of trends and consolidations. Just by looking at a candlestick chart created with this method, you get a good idea of the market's status and its strength. Take a look at the candlestick chart of Canon ADR in Figure 1A versus the heikin-ashi modified chart in Figure 1B. Which chart would you prefer to use? CALCULATION The "open," "high,"......

Words: 2675 - Pages: 11

Premium Essay

Forex

...UNIT - I Foreign Exchange Markets A Foreign exchange market is a market in which currencies are bought and sold. It is to be distinguished from a financial market where currencies are borrowed and lent. General Features Foreign exchange market is described as an OTC (Over the counter) market as there is no physical place where the participants meet to execute their deals. It is more an informal arrangement among the banks and brokers operating in a financing centre purchasing and selling currencies, connected to each other by tele communications like telex, telephone and a satellite communication network, SWIFT. The term foreign exchange market is used to refer to the wholesale a segment of the market, where the dealings take place among the banks. The retail segment refers to the dealings take place between banks and their customers. The retail segment refers to the dealings take place between banks and their customers. The retail segment is situated at a large number of places. They can be considered not as foreign exchange markets, but as the counters of such markets. The leading foreign exchange market in India is Mumbai, Calcutta, Chennai and Delhi is other centers accounting for bulk of the exchange dealings in India. The policy of Reserve Bank has been to decentralize exchages operations and develop broader based exchange markets. As a result of the efforts of Reserve Bank Cochin, Bangalore, Ahmadabad and Goa have emerged as new centre of foreign exchange......

Words: 21097 - Pages: 85

Free Essay

Forex

...Home Business Ideas If you are trading products or services currently and would like to work from dwelling enterprise among the fortunate to kind of have a clear concept of who a few businesses. Otherwise, set the route for you to make a dwelling from dwelling to search for the right concept to question that. 6 consider the most popular dwelling business ideas is here. 1. If you deal a merchandiser, you can start with affiliate trading. Affiliate charges for other people's products on the market. 75% or in some situations, up to about 25% from sales of digital products for the cost of 100% of the dividends can be highly profitable. This means that your initial effort to conceive the first sale after doing again the old alignment on your part, without endeavoring to pursue some of the recurring sales opportunities better. There are a allotmentment of persons and companies proposing affiliate affirmation. Online is more well known, such as charge Junction Clickbank or seek for some. All house names such as Amazon and large-scale shops like Wal-Mart, this affiliate program. Most sellers offer informative and promotional components for yourself, you can start with little or no cost. 2. If you are sensibly well writing, can be a freelance author. Since the blast of the Internet and the need for a high-quality website content that has increased considerably. Numerous webmasters are too engaged conceiving the content that they need to be able to spend enough time to run......

Words: 847 - Pages: 4

Premium Essay

Forex

...Why should we hedge? Business is exposed to several risks, currency risk being one of them Objective of hedging is to ensure: Predictability in Income Statement thereby reducing cash flow volatility. Revenue is generated & receivables are collected at budgeted rates Maintaining margins on long term projects as these projects are priced & bid with an exchange rate assumption, which needs to be protected to ensure desired margins Managing the translation risks in case of multiple geographies & overseas entities Best Practices A good risk management and hedging policy should be debated, understood & approved at the highest level (Board) The policy should indentify risks entity is exposed to, ways to measure these risks & suggest methods to mitigate these risks Should specify clear identification of responsibilities, authorities & limitations on its implementation Should state the purpose of hedging clearly - profit, protection, reducing volatility. Should suggest appropriate risk management tools like Sensitivity Analysis, VAR to contain risks Should be reviewed periodically by board in view of changing risks, market dynamics. Enctheirage use of natural hedges to reduce hedging costs METHODS OF HEDGING Methods of hedging can be classified as a. Internal methods b. External methods ...

Words: 3106 - Pages: 13

Premium Essay

Forex

...Country Profiles Forex Traders' Guide to Major Economies Today we're going to take a trip around the world, but it ain't gonna take 80 days. If you're fast enough to keep up, we can probably get around in just 80 seconds! ...Not! In any case, we'll make sure you learn about the nitty-gritty of each major economy and what makes its engine go. For each country that we will be touring, we'll start off with a quick peek at the important facts and figures, followed by an overview of its economy. Once that's out of the way, we'll visit the country's central bank to find out some of their secrets. In this section, we will explore the powerful monetary policy tools central banks employ to control the country's economy. Hopefully, we'll stumble into the room where they keep their printing plates and we can sneak out the back door and sell it on the black market. We're kidding - we're here to teach you how to trade forex the legal way. After that, we'll discuss the important characteristics that differentiate that country's local currency from all the rest, as well as hard-hitting economic indicators for that country. To keep the trip interesting, we'll be dishing some trivia every now and trading tactics that will prove useful later on when you go off on your pip-catching adventure! And as we promised, this very exclusive field trip is covered by your scholarship. No need for travel visas and no need to buy a travel fanny. Although if you're paranoid like Huck, then go...

Words: 17372 - Pages: 70

Premium Essay

Forex

...UNIT - I Foreign Exchange Markets A Foreign exchange market is a market in which currencies are bought and sold. It is to be distinguished from a financial market where currencies are borrowed and lent. General Features Foreign exchange market is described as an OTC (Over the counter) market as there is no physical place where the participants meet to execute their deals. It is more an informal arrangement among the banks and brokers operating in a financing centre purchasing and selling currencies, connected to each other by tele communications like telex, telephone and a satellite communication network, SWIFT. The term foreign exchange market is used to refer to the wholesale a segment of the market, where the dealings take place among the banks. The retail segment refers to the dealings take place between banks and their customers. The retail segment refers to the dealings take place between banks and their customers. The retail segment is situated at a large number of places. They can be considered not as foreign exchange markets, but as the counters of such markets. The leading foreign exchange market in India is Mumbai, Calcutta, Chennai and Delhi is other centers accounting for bulk of the exchange dealings in India. The policy of Reserve Bank has been to decentralize exchages operations and develop broader based exchange markets. As a result of the efforts of Reserve Bank Cochin, Bangalore, Ahmadabad and Goa have emerged as new centre of......

Words: 21098 - Pages: 85

Premium Essay

Forex

...Index Sr. No. Topics Page No.s 1. Foreign Exchange Market 02 2. Foreign Exchange Rate 03 3. Determinants of Foreign Exchange Rates 04 4. Exchange Quotation 06 5. Direct Quotation (Home Currency) 08 6. Indirect Quotation (Foreign Currency) 09 7. Conclusion 10 Foreign Exchange Market Introduction: • Today no country is self sufficient in its demand and supply of goods and services and factors of production such as labour and capital are seen moving freely across the national frontiers. • All the countries trade in goods and services, borrow and lend, invest and accept investments with other countries with nominal or full control to govern the currency flow and trade. • Since different countries have their own currencies (with different purchasing power), the settlement of payments cannot be made with the currency of one country. Meaning: • The Foreign Exchange market is a decentralized world-wide market; the participants in the market include central banks, commercial banks, brokers, corporations and individuals. • The central banks monitor both market movements and sentiments and intervene according to government policy and prevailing situation. Functioning: • International economic and commercial relations between countries involve exchange of goods and services and payment for these exchanges. • The payments lead to conversion of one currency into another. • Each country has its financial system and its own currency and financial......

Words: 1303 - Pages: 6

Premium Essay

Forex

...Thesis Report On Foreign Exchange Division of Standard Bank Submitted by WWW.ASSIGNMENTPOINT.COM Banking sector is expanding its hand in different financial events every day. At the same time the banking process is becoming faster and easier. As the demand for the better service increases day by day, banks are coming up with different innovative ideas and products. In order to survive in the competitive field of the banking sector, all the banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure. The word bank has been derived from the Latin word Bancs or from Basque, which means a bench in English. The early bankers transacted their business at a bench in a market place. Bank is a financial institution which deals in money, receive deposit from customers, honor customers’ drawings against such deposits on demand, collect Cheques for customers and lend or invest deposits to individuals, companies or other organizations. So, bank is an intermediary institution that makes relationship between the owner of surplus savings and the investor of deficit capital. In this process, banks earn profit by receiving interest from the borrowers who want to take short-term or long-term loans and making relatively lower interest payment to the depositors for providing their funds for use by the bank. ...

Words: 17817 - Pages: 72

Premium Essay

Forex

...As Americans our nation has been protected from role of money as a commodity. Americans enjoyed a world where the dollar was the main currency of exchange and stability throughout the last half of the Twentieth Century. European citizens frequently travel to a next-door nation whose currency is entirely different than their own and where their own currency would not be accepted, and American’s travelling to Canada or Mexico could be fairly sure merchants would accept their Dollars. As the first decade of the 21st Century now draws to a close, on the other hand a shock may be in store for Americans. The U.S. Dollar may no longer be the main currency of exchange in the world and may no longer be such a desired currency to hold. Many people would ask how and why a currency increases or decreases in value, the effects are to be considered when looking at gold standard. Money, although often thought of as only a medium of exchange, has a value of its own and is also a commodity, in the same way as oil, gold, silver, or corn are commodities (Feiler, Schilling). The price of money as a commodity is often determined or set as a result of government action and international trade. Value is determination by the foreign exchange markets of the world. The foreign exchange rates have a lot to do with it as well for example; Exchange rates respond directly to all sorts of events, both tangible and psychological—business cycles; balance of payment statistics; political developments; new......

Words: 1124 - Pages: 5

Premium Essay

Forex Management

...Executive Summary ___________________________________________________________________________ The foreign exchange market does not have a physical market place called the foreign exchange market. It is a mechanism through which one country's currency can be exchange i.e. bought or sold for the currency of another country. The foreign exchange market does not have any geographic location. The market comprises of all foreign exchange traders who are connected to each other through out the world. They deal with each other through telephones, telexes and electronic systems. The foreign exchange market operates twenty four hours a day during the business week; the only time it is silent is after the New York market closes on Friday afternoon and before the Sydney market opens on Monday morning (which would be Sunday evening New York time). In the aftermath of the Asian crisis, which curbed and restricted offshore trading in regional currencies, most derivatives markets in Asia are still in their infancy. Financial institutions trying to introduce or transplant products from mature markets to those that are lesser developed are meeting with limited success. The RBI has ushered rupee derivatives trading into the country: it has formally allowed banks and corporate to hedge against interest rate risks through the use of interest rate swaps (IRS) and forward rate agreement (FRA). According to the guidelines issued by RBI there will be no restriction on the tenure and size of the...

Words: 11166 - Pages: 45

Premium Essay

Forex Management

...value of the goods was expressed in terms of other goods. This type of trade was called as the Barter System. The limitations of this system of trade paved the path for the introduction of ‘Money’and Money gave birth to the need to exchange different currency:- Foreign Currency trading. The origin of Foreign Exchange (Forex) trading traces its history to centuries ago. The Babylonians are credited with the first use of paper notes and receipts. However, during this phase of history Speculation hardly ever happened. During the middle ages, the introduction of a paper form of governmental I.O.U. gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion.These paper bills represented transferable third-party payments of funds, making foreign currency exchange trading much easier for merchants and traders and causing these regional economies to flourish. These I.O.U’s have now become the basis of today's modern currencies. From its infantile stages during the Middle Ages to First World war, the forex markets were relatively stable and without much speculative activity. During this phase, most Central banks supported their currencies with convertibility to gold. This standard had a major weakness called the ‘boom-bust’ pattern. As an economy strengthened (Boom), it would import a great deal from out of the country until it ran down its gold reserves required to support its money; as a result, the money supply would diminish,......

Words: 2242 - Pages: 9

Premium Essay

Forex Instrument

...A Project report On Foreign Exchange Market with Hedging Instruments In partial fulfillment of the requirements of for award of Master of Management Studies Through Atharva Institute of Management Studies under the guidance of Prof. Aditi Mahajan Submitted by Paras Gada MMS Batch: 2010 – 2012. DECLARATION I, Mr. Paras Gada of Atharva Institute of Management Studies pursuing Masters of Management Studies hereby declares that I have completed this project on “Foreign Exchange Market with Hedging Instruments” for the Academic period 2010 – 12. The Project has not formed the basis for award of any other degree, associates, fellowship or any other similar titles. This information submitted is true and original to the best of my knowledge. Place: Mumbai Date: 3rd April, 2012 Signature of the Student ACKNOWLEDGEMENT The present work is an effort to throw some light on ‘Foreign Exchange market with Hedging Instrument’ the work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledged the encouragement and guidance received by Prof Aditi Mahajan, for completion of my project report. CERTIFICATE This is to certify that Mr. Paras Gada, a student of Atharva Institute of Management Studies, of MMS SEM IV bearing Roll No. 12 and specializing in Finance has successfully completed the project titled “To study......

Words: 10858 - Pages: 44

Premium Essay

Forex Derivatives

...Workbook for NISM-Series-V- A: Mutual Fund Distributors Certification Examination National Institute of Securities Markets www.nism.ac.in This workbook has been developed to assist candidates in preparing for the National Institute of Securities Markets (NISM) Certification Examination for Mutual Fund Distributors. Workbook Version: July 2011 Published by: National Institute of Securities Markets © National Institute of Securities Markets, 2010 Plot 82, Sector 17, Vashi Navi Mumbai – 400 705, India All rights reserved. Reproduction of this publication in any form without prior permission of the publishers is strictly prohibited. Disclaimer The contents of this publication do not necessarily constitute or imply its endorsement, recommendation, or favoring by the National Institute of Securities Market (NISM) or the Securities and Exchange Board of India (SEBI). This publication is meant for general reading and educational purpose only. It is not meant to serve as guide for investment. The views and opinions and statements of authors or publishers expressed herein do not constitute a personal recommendation or suggestion for any specific need of an Individual. It shall not be used for advertising or product endorsement purposes. The statements/explanations/concepts are of general nature and may not have taken into account the particular objective/ move/ aim/ need/ circumstances of individual user/ reader/ organization/ institute. Thus NISM and SEBI do not assume any...

Words: 66892 - Pages: 268

Free Essay

Forex Analyst

...ANALYSIS OF PROGRAMMING LANGUAGE PARADIGMN BY GROUP 4 (M. Sc.) CSC 801 PROGRAMMING LANGUAGE PARADIGMNS TERM PAPER SUBMITTED TO THE DEPARTMENT OF COMPUTER SCIENCE, UNIVERSITY OF LAGOS, AKOKA June, 2015. ABSTRACT This is a survey on the programming languages paradigm: Imperative, Scripting, logic, Functional, object oriented and Markup. Our survey work involves a comparative study of these six programming languages with respect to the above programming paradigm using the following criteria: secure programming practices, web application development, OOP-based abstractions, reflection, Reusability, Portability, Reliability, Readability, Availability of compilers and tools, Familiarity, Expressiveness We study these languages in the context of the above mentioned criteria and the level of support they provide for each one of them. TABLE OF CONTENT 1. OVERVIEW OF PROGRAMMING LANGUAGE PARADIGMS 1.1 INTRODUCTION 1.2 CRITERIA OF LANGUAGE COMPARISON 2. IMPERATIVE LANGUAGES 2.1 Imperative Paradigm 2.1.2 Java as an Imperative Paradigm 2.1.3 Criteria 3. SCRIPTING LANGUAGES 3.1 Scripting Paradigm 3.2 Php as an Scripting Paradigm 3.3 Criteria 4. FUNCTIONAL LANGUAGES 4.1 Functional Paradigm 3.2 Php as an Scripting Paradigm 3.3 Criteria 5.1 LOGIC LANGUAGES 5.1.1 Readability 5.1.2 Ease of Learning 5.1.3 Ease of Maintenance 5.1.4 Extensibility 5.1.5 Pedagogy 5.1.6 Portability 6.1 OBJECT ORIENTED LANGUAGES (OOL) 6.1.1 Readability 6.1.2 Ease of Learning 6.1.3......

Words: 4013 - Pages: 17