Foreign Exchange Market

Foreign Exchange market is a system of stable economic and organizational relations under operations of sale and purchase of foreign currencies and payment documents in foreign currencies. A wide range of transactions for foreign trade settlements, tourism, capital migration, currency expenditure insurance, diversification of currency reserves, currency liquidity movement and different measures of currency intervention are performed in the foreign exchange market. Large transnational banks act as key entities of the foreign exchange market. The place of different currencies in the foreign exchange market is determined by their place in international economic relations. The largest part of transactions is made with USD as well as Euro, Great Britain Pound Sterling, Yen and Swiss Frank. International means of payment, CDR, have been lately included in circulation. Territorial foreign exchange markets are usually tied to large banking and foreign exchange centers (London, Paris, New-York, Tokyo, etc.). Two types of operations are typical of the foreign exchange market. They are spot (immediate delivery of currency) and forward (currency is delivered in a specified time period, such as a month or more, at the rate agreed at the time of the transaction).