Structured finance


Functions of the FX Market



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CORPORATE FINANCE AND FINANCIAL MARKETS-POWERPOINT-SESSION 4
Alternative Investments 2016
Functions of the FX Market
Three major functions are

Transferring purchasing power from one country to another. Providing credit for international trade Providing facilities for hedging and speculation




Segments of the FX Market
Two broad segments

Spot/Cash FX market

FX Derivatives Markets Forward Market Futures Market Swap Market Options Market


FX Market Participants

Exporters-sell FX generated from exporting activities

Importers-buy FX to pay for imports

Cross-border Investors-domestic investors buy FX to invest abroad and sell FX proceeds from foreign investments. Foreign investors sell FX to invest locally and buy FX to repatriate proceeds from their investments back to their country of origin.


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