1. Functions of Foreign Exchange Market Transfer Function Credit Function Hedging Function Foreign Exchange Market Functions of Foreign Exchange Market

2. Types of Foreign Exchange Transfer Function Credit Function Hedging Function Facilitates the conversion of one currency into another i.e. payment between exporters and importers. For e.g.. Indian rupee is converted into U.S. dollar and vice-versa. Foreign Exchange Market Functions of Foreign Exchange Market

3. Types of Foreign Exchange Transfer Function Credit Function Hedging Function It provides credit for foreign trade. 3 Months Bill of exchange are generally used as the medium for international payments. Hence normally the credit period will be these three months and this will enable the seller to convert the goods into cash during these period. Foreign Exchange Market Functions of Foreign Exchange Market

4. Types of Foreign Exchange Transfer Function Credit Function Hedging Function The price level (Value) of international currencies keeps changing time to time. Hence to avoid the risk of such changes importer and exporter may comes to an agreement to fix the trade at the current market price. This process is called Hedging. Foreign Exchange Market Functions of Foreign Exchange Market