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Banking. Foreign exchange market (FX): concept, structure, participants (the most important)

Lecture notes, cheat sheets

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Topic 10. Foreign exchange market (VR): concept, structure, participants

VR is a mechanism that regulates relations for the purchase and sale of foreign currency on the basis of supply and demand, as well as regulates relations for the purchase of goods and services and relations for the provision of loans. VR RF is one of the segments of the financial market. Necessity: there is no single means of payment in the world.

Functions:

1) timely implementation of international payments;

2) regulation of exchange rates (ratio of monetary units of different countries);

3) speculative profit;

4) an instrument of economic policy.

Structure of VR: - exchange (interbank) currency market; - OTC; - futures (terms currency market); - forward (terms currency market) and cash currency market.

Features of the exchange currency market: the highest level of organization; serves settlements related to the export-import of goods and services; it is on the stock exchange that they buy currency for financing; conducts exchange rate policy through the currency exchanges of the Central Bank.

Advantages: one of the cheapest (minimum commissions); cheap source. currencies; liquid foreign exchange market; allows you to quickly and without loss convert the currency into rubles; strengthening the role of regional structures; all operations are strictly regulated (reliability and high liquidity).

OTC market - a system of foreign exchange transactions between commercial banks.

Features of over-the-counter VR: the growth rate is much faster than in the exchange currency market (2 times); this market is larger in terms of volume of operations.

Advantages: less control of the Central Bank; more operational; independence of action; currency transactions are completed faster; high speed of calculations.

Participants: 1) passive participants (irregularly, not en masse, make currency transactions);

2) active (large permanent transactions);

3) depository, clearing (mutually offset) and settlement centers.

From an institutional point of view, BP is a set of banks (transnational banks - they account for 85% of foreign exchange transactions), brokerage firms, corporations (especially transnational companies), the country's central bank.

Authors: Shevchuk D.A., Shevchuk V.A.

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