Posted by R. MAK. on August 7, 2009 ·
Foreign exchange reserves (also referred to as Forex reserves) in a strict sense are only the foreign currency deposits and bonds that are held by central banks and monetary authorities. However, commonly foreign exchange and gold, SDRs and IMF reserve positions are…
Posted by R. MAK. on August 5, 2009 ·
In this article I will explain you the balance Balance of payments model and Asset market model.A nation that is facing a trade deficit will experience reduction in its foreign exchange reserves and due to this the value of its currency will…
Posted by R. MAK. on August 4, 2009 ·
A fixed exchange rate, is sometimes also referred to as a pegged exchange rate. It is a type of exchange rate regime in which a value of one currency is matched to the value of another single currency or to a group of other currencies, or it may also be matched to…
Posted by R. MAK. on August 3, 2009 ·
When the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency then Dollarization takes place. The term is not only applied to usage of the United States dollar, but generally it is applied to the…
Posted by R. MAK. on August 2, 2009 ·
Each private central bank has got the monopoly control over the supply and production of the country’s own currency, in most of the cases. There are exchange rates in order to facilitate trade between these currency zones, which are those prices at which the currencies (and the goods and services of individual currency zones) can be exchanged against each other. On the basis of their exchange rate regime currencies can be…
Posted by R. MAK. on July 31, 2009 ·
For any given currency Supply and demand, and thus its value, are not influenced by any single element but rather than that they are influenced by several factors. These elements are generally divided into three categories these are…
Posted by R. MAK. on July 31, 2009 ·
For the majority of FX trades there is no unified or centrally cleared market , and there is very little cross-border regulation. As the currency market is having the over-the-counter (OTC) nature, there are rather a number of interconnected marketplaces, where the trading of different currencies instruments take place. This shows that rather than having…
Posted by R. MAK. on July 31, 2009 ·
Unlike a stock market, where it is required that all participants have access to the same prices, the foreign exchange market has been divided into levels of access. The inter-bank market is at the top, which is constituted of the largest investment banking firms…
