How to Cite this Page MLA Citation: Most Relevant Color Rating Essay Length. Reserve Bank of India RBI rupee-dollar reference rate. Only Indian entities can participate in the market foreign institutional investors are left outbut foreign exchange dealers expect this norm also to change after the market matures. Benefits The argument given in forex of futures trading is that it helps in better price discovery of exchange rate. However, the recent ban on commodity futures soy oil, rubber, potato and chickpea has shown that futures can also lead to price manipulation and inflation exchange rate that does not go with the fundamentals of the economy in currency futures case. The interbank market can benefit from the instrument due to features like "netting", where a bank's trades are offset against each other to give one net position on the exchange, and will free up credit lines as counterparty risk is minimized. The instrument could also useful for exporters and importers specially the small and medium enterprises SMEs that do not have sufficient financial muscle to participate on the over-thecounter OTC market. They would be able to get finer pricing than the current offerings The small contract size will make futures attractive for retail investors. How that pans out will depend on what exchanges offer on margin requirements, membership fees and technology. Thanks to the strategic policy initiatives, daily turnover in the Indian foreign exchange market has grown significantly in the past 2 years. The balance 50 percent is accounted for by derivatives such as swaps and currency forwards. Thus, unlike the global india market where india share is split in the ratio of 30 to 70 between spot and derivative market, the market share between spot and derivative market is split Besides the turnover, the foreign exchange markets have also witnessed larger participation, liquidity and a variety of financial products. Forex witnessed a reasonably good turn over on the very first day of currency futures trading in India. At present, banks are using currency india only for proprietary trading. One will see real liquidity once customers start accessing the markets. Potential in India India has a GDP of USD 1. Table1 below gives the GDP of developed economies. India is fast emerging india an economic power and is ranked 12th in nominal GDP rankings which shoots up to 4th when we consider the debatable Purchasing Power Parity PPP method. Top Countries by nominal GDP and PPP GDP Rank Country GDP USD mn Rank Country GDP USD mn in PPP — World 54, — World 64, — EU 16, — EU 14, 1 USA 13, 1 USA 13, 2 Japan 4, 2 China 69, 3 Germany 3, 3 Japan 4, 4 China 3, 4 India 2, 5 UK 2, 5 Germany 2, regulator France 2, 6 UK 2, 7 Italy 2, 7 Russia 2, 8 Spain 1, 8 France 2, 9 Canada 1, 9 Brazil 1, 10 Brazil 1, 10 Italy 1, 11 Russia 1, 11 Spain 1, 12 India 1, 12 Mexico 1, Source: IMF data Table 2 highlights the presence of India in international trade occupying 19th position worldwide from near oblivion 15 years ago. The growing international trade will help currency futures as exporters and importers can use them to hedge out the currency risk in their business. This has been boosted by growing interest of investors beyond the equities, with its trading volume clocking the fastest growth in the league. The currency futures are sure to add more to it. Even though NSE still trails significantly from the top two exchanges with million contracts as against CME Group entity formed after the merger of Chicago Mercantile Exchange and Chicago Board of Trade with 2. Impact The trading of rupee futures would impact the exchange rate and given that rupee exchange rate is not yet fully floating we are likely to see significant RBI intervention when the instrument begins to impact the exchange rate significantly. There forex to be a compromise in at least one of the three objectives. Although the instrument is aimed to allow entities to hedge their exchange rate risk, the opposite can happen. The futures market can drive the exchange rate and lead to volatile exchange rate which could further increase speculation in the instrument leading to more volatility and hence a vicious circle could develop. RBI would have to intervene much more frequently to stabilize the exchange rate which might not be a difficult task given the USD bn reserves. There is a chance that instead of regulator exchange rate volatility, futures trading may increase it, defeating the very purpose it is meant to accomplish. Until, the rupee becomes fully floating, the rupee exchange rate could be maintained in a band by RBI intervention and stiff controls on capital inflows so that RBI reserves are enough to maintain the band. While a flexible exchange rate is needed to ensure domestic policy autonomy, the huge swings that do occur under a fully floating rate are damaging. The idea is to try to ensure flexibility without volatility. Over time, regulator the market decide. However, it can definitely ensure that the slide or the rise is not too steep to affect entities involved immensely. Conclusion The introduction is a positive step in the Indian financial scenario and is likely to benefit multiple entities. Given the increasing international trade from India it has the potential to lead India to even higher status in the world derivatives markets. However, ample precaution, intervention and india should be exercised to ensure that the instrument actually benefits the regulator that need it. This would mean a regulator role for the regulator who would be an important factor in the development and stability regulator the instrument and the market. Free Essays Free Essays A-F Free Essays G-L Free Essays M-Q Free Forex R-Z. Additional Popular Essays Excellent Essays Essay Topics Plagiarism Forex a Paper. Company Terms of Service Privacy DMCA Contact FAQ. Bitcoin Essay - The Crypto Currency: Bitcoin Prelude There are lots of ways to make money: You can earn it, find it, or counterfeit it. Or, if you are Satoshi Nakamoto, you can forex it. In Novembera mysterious entity going forex the persona "Satoshi Nakamoto" published a research paper outlining his design for a new digital currency that he called bitcoin. None of the veterans had heard of him, and what little information could be gleaned was murky and contradictory. 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Until recently, money has always been perceived as a physical note or coin that can be used to make transactions. However, Bitcoin is basically an encrypted digital block that can be stored in an online wallet and securely stored, sent, and received via a special network on the Internet Friedman Financial derivative securities are used by many businesses to protect against risks or to profit from them. Hedging and speculation activities can be used against various types of risks faced by companies including those associated with interest rates, costs of commodities, and currency exchanges The paper will proceed to give a detailed understanding of the interworking of the world reserve currency with international trade and its importance to the U. The Theory of Optimum Currency Areas Essay - The theory of optimum regulator areas OCA explores the conditions under which a common currency can india the economic efficiency of a region. 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Forex trading legal or illegal in India with proof in hindi
Forex trading legal or illegal in India with proof in hindi
They see a self-generating track to the literary establishment, on which the most fortunate jump to fellowships, writing colonies, agents, publishing deals and professorships, where they are indoctrinated into the status quo.
A total of 1,367 dipsticks voted for this thoroughly nasty piece of work, who in the run-up to the election, outraged homosexuals, and many more besides, by branding civil partnerships as.
They see a self-generating track to the literary establishment, on which the most fortunate jump to fellowships, writing colonies, agents, publishing deals and professorships, where they are indoctrinated into the status quo.
A total of 1,367 dipsticks voted for this thoroughly nasty piece of work, who in the run-up to the election, outraged homosexuals, and many more besides, by branding civil partnerships as.