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EI“VSTU” Foreign language 2015
Currency transactions eltsova D. A.
. There are three ways to spend money: first - on wine second - on women third - to make money work on you. The first two are more enjoyable, though the third is the most reliable. Streltsova D. A.
Contents 1. Currency transactions. 2. Function. 3. Currency market participants. 4. Currency risk. 5. Conclusion. Streltsova D. A.
1. Currency transactions. Foreign exchange market is a system of economic relations between banks and their customers regarding the purchase and sale of foreign currency. Streltsova D. A.
Currency transactions are transactions with foreign currency on the territory of the country and abroad. Streltsova D. A.
The currency market is functioning in two areas: • transactions are made on an exchange; • transactions of purchase-sale of foreign currency are made on the interbank market, when banks enter into a relationship without going through the exchange. Streltsova D. A.
2. Function Streltsova D. A. Function is the practical manifestation of the economic entity in the global currency market. The main functions of the global currency market: commercial value, information, regulatory, speculative.
• The commercial function is the provision of plots of foreign and national currency. • Value function — the establishment of this level of the exchange rate whereby world foreign exchange market and the economic system as a whole will be in equilibrium. • An information function — providing the participants with the currency market information about its functioning. • Regulatory function — the organization of the global currency market in accordance with national and international laws. Streltsova D. A.
3. Currency market participants Participants in the global currency market — legal entities and individuals that conduct operations in the global currency market. Streltsova D. A.
In order to participate in the transactions on the world currency market participants of this market are divided into five groups: entrepreneurs, hedgers, speculators, brokers and currency regulation bodies. Entrepreneurs are participants of the currency market to ensure exchange operations. This category of participants is primary in relation to other Streltsova D. A.
Streltsova D. A. Hedgers are participants of the currency market, insuring currency risk when making foreign exchange transactions. Speculators are participants in the global currency market, carrying out the bulk of transactions in currency fluctuations. The intermediaries specialize in providing services for currency trading.
Streltsova D. A. Brokers is stock brokers, trade currency for the account and on behalf of clients. Dealers operate on the currency market on its own behalf and at own expense.
Streltsova D. A. 4. Currency risk is the risk of foreign exchange losses in the purchase and sale of currencies.
For protection from foreign exchange losses in operations of sale and purchase of foreign currencies using hedging, which is a variety of methods and techniques of foreign exchange risk insurance losses. Streltsova D. A.
5. Conclusion Streltsova D. A. Thus, we examined the nature, content types the foreign exchange market. The term "currency transaction" is used to denote the entire set of transactions in which there is a change of ownership to currency valuables. The need for a standardized infrastructure for circulation of currency values, leads to the creation of foreign exchange markets.