Foreign exchange market its types and elements. Foreign exchange markets

Forward contract Swap Currency market Forex Spot Capital market(Stock dealing) Money market Treasury bill, agency bill, municipal bill,
commercial, banking Certificate of Deposit Savings certificate Repurchase agreement Mutual investment fund (UIF) Precious (bank) metals market Real estate market(Realtor)

In the foreign exchange market, the interests of investors, sellers and buyers of currency values ​​are coordinated. Western economists characterize the foreign exchange market from an organizational and technical point of view as an aggregate network modern means connections connecting national and foreign banks and brokerage firms.

Story

Prerequisites for the development and establishment of a modern foreign exchange market

Currency exchange operations existed in the ancient world and in the Middle Ages. However, modern foreign exchange markets emerged in the 19th century. The main prerequisites that contributed to the formation of the foreign exchange market in modern understanding the following appeared:

• widespread development of various international economic relations;
• creation of a global monetary system based on the organization and regulation of currency relations, secured by interstate agreements;
• widespread use of credit facilities for international settlements and payments;
• consolidation and centralization of banking capital, widespread development of correspondent relations between banks different countries including maintaining correspondent accounts in foreign currency;
• development information technologies and means of communication: telegraph, telephone, telex, which simplified contacts between foreign exchange markets and reduced the time to obtain information about completed transactions.

Developing national currency markets and their interaction have formed a single global currency market, in which leading currencies in the world's financial centers began to circulate freely.

Types of foreign exchange transactions, their evolution

Historically, there were two main methods of payment in international transactions: tracing and remittance, which were used in international transactions before the First World War and partially (to a lesser extent) in the period between the First and Second World Wars.

The term “tracing” is associated with the use of a bill of exchange - draft. When paying using this method, the creditor issues a draft to the debtor in his currency (for example, a creditor in London presents a demand to a debtor in Chicago for payment of a debt in dollars) and sells it on his foreign exchange market at the buyer's bank rate. Thus, when tracing, the creditor acts as an active party; he sells the bill in the debtor's currency on his foreign exchange market.

When remitting, the active person is the debtor: he buys the creditor’s currency on his foreign exchange market at the seller’s rate.

In the years after World War II until the late 1950s, when foreign exchange restrictions were in effect, industrial developed countries spot currency transactions (with immediate delivery of currency) prevailed and forward transactions"forward".

Since the 1970s, futures and options currency transactions began to develop. This kind transactions provided new opportunities for all participants in the foreign exchange market, both for currency speculators and hedgers, that is, for protection against currency risks and obtaining speculative profits. Banks began to carry out foreign exchange transactions in combination with swap operations with interest rates.

Main characteristics of modern world foreign exchange markets

Modern world currency markets are characterized by the following main features.

1. The international nature of currency markets based on the globalization of world economic relations and widespread use electronic means communications for transactions and settlements.
2. Continuous, non-stop nature of transactions throughout the day, alternately in all parts of the world.
3. Unified character foreign exchange transactions.
4. The use of transactions in the foreign exchange market for the purpose of protecting against currency and credit risks through hedging.
5. A huge share of speculative and arbitrage transactions, which are many times greater than foreign exchange transactions associated with commercial transactions. The number of currency speculators has increased sharply and includes not only banks and financial and industrial groups, TNCs, but also many other participants, including individuals and legal entities.
6. Volatility of exchange rates, which does not always depend on fundamental economic factors.

The modern foreign exchange market performs the following functions:

1. Ensuring the timeliness of international payments.
2. Creating opportunities to protect against currency and credit risks.
3. Ensuring the interconnection of global currency, credit and financial markets.
4. Creating opportunities for diversification of foreign exchange reserves of the state, banks, and enterprises.
5. Market regulation exchange rates based on the interaction of demand and supply of currencies.
6. The possibility of implementing monetary policy as part of the state economic policy. Possibility of implementing agreed actions different states in order to implement macroeconomic policy goals within the framework of interstate agreements.
7. Providing opportunities for foreign exchange market participants to obtain speculative profits through arbitrage operations.

In terms of volume of transactions, the foreign exchange market significantly exceeds other segments of the financial market. Thus, the daily volume of transactions in 1997 on the stock market was estimated at 100-150 billion dollars, on the bond market - 500-700 billion dollars, and on the foreign exchange market - 1.4 trillion dollars (versus 205 billion dollars in 1986). Currently, the volume of foreign exchange transactions is about 4 trillion dollars per day.

Foreign exchange market instruments

In the modern foreign exchange market we can distinguish the following types transactions.

Currency transactions with immediate delivery (“spot”)

Using the “spot” operation, banks meet the needs of their clients in foreign currency, transfer capital, including “hot” money, from one currency to another, and carry out arbitrage and speculative operations.

Futures transactions with foreign currency

To urgent foreign exchange transactions include forward, futures and options transactions, as well as currency swaps.

Forward transactions

Options

Currency swaps

Currency swap swap- barter, exchange) is a transaction that combines the purchase and sale of two currencies on the terms of immediate delivery with a simultaneous counter-transaction for certain period with the same currencies. Each party is both a seller and a buyer of a certain amount of currency. A currency swap is not a standard exchange-traded contract.

For swap transactions, a cash transaction is carried out at the spot rate, which in a counter (forward) transaction is adjusted to take into account a premium or discount depending on the dynamics of the exchange rate. At the same time, the client saves on margin - the difference between the rates of the seller and the buyer for a cash transaction. Swap operations are convenient for banks: they do not create an open position (the purchase is covered by the sale), and they temporarily provide the necessary currency without the risk associated with changes in its exchange rate.

Foreign exchange market participants

The main participants in the foreign exchange market are:

• Central banks. Their function is to manage government foreign exchange reserves and ensure exchange rate stability. To implement these tasks, both direct foreign exchange interventions and indirect influence can be carried out - through regulating the level of the refinancing rate, reserve standards, etc.
• Commercial banks. They conduct the bulk of foreign exchange transactions. Other market participants hold accounts in banks and carry out through them conversion and deposit and credit operations necessary for their purposes. Banks concentrate the aggregate needs of commodity and stock markets in currency exchange, as well as in attracting/placing funds. In addition to satisfying customer requests, banks can conduct operations independently at the expense of own funds. Ultimately, the international foreign exchange market (forex) is a market for interbank transactions. The biggest influence is exerted by large international banks, whose daily transaction volume reaches billions of dollars. The volume of one interbank contract with real delivery of currency on the second business day (spot market) is usually about 5 million US dollars or its equivalent. The cost of one conversion payment ranges from 60 to 300 dollars. In addition, you have to incur costs of up to 6 thousand dollars per month for an interbank information and trading terminal. Due to these conditions, conversions of small amounts are not carried out on Forex. To do this, it is cheaper to contact financial intermediaries (a bank or a foreign exchange broker), who will carry out the conversion for a certain percentage of the transaction amount. At large quantities clients and multidirectional orders, a situation of internal clearing regularly arises, when the intermediary does not need to contact a third-party counterparty (there is no need to carry out a real conversion through Forex). But intermediaries always receive their commissions from clients. It is precisely because not all client requests are received on Forex that intermediaries can offer clients commissions that are significantly lower than the cost of direct Forex transactions. At the same time, if intermediaries are eliminated, the cost of conversion for the end client will inevitably increase.
• Firms engaged in foreign trade operations. Total requests from importers form a stable demand for foreign currency, and from exporters - its supply, including in the form of foreign currency deposits (temporarily free balances in foreign currency accounts). As a rule, companies direct access do not have access to the foreign exchange market and carry out conversion and deposit operations through commercial banks.
• International investment companies, pension and hedge funds, insurance companies. Their main task is diversified asset portfolio management, which is achieved by placing funds in securities of governments and corporations various countries. In dealer slang they are simply called funds. funds). TO this species One can also include large transnational corporations making foreign industrial investments: creating branches, joint ventures, etc.
• Currency exchanges. In a number of countries, national currency exchanges operate, the functions of which include exchanging currencies for legal entities and forming a market exchange rate. The state usually actively regulates the level of the exchange rate, taking advantage of the compactness of the local exchange market.
• Currency brokers. Their function is to bring together the buyer and seller of foreign currency and carry out conversion or loan-deposit operations between them. For their intermediation, brokerage firms charge a brokerage commission as a percentage of the transaction amount. But the amount of this commission is often less than the difference between the bank’s loan interest and the interest rate bank deposit. Banks can also perform this function. In this case, they do not issue a loan and do not bear the corresponding risks.
• Private individuals. Citizens spend wide range operations, each of which is small, but in total can create significant additional demand or supply: payment for foreign tourism; Money transfers wages, pensions, fees; purchases/sales of cash currency as a store of value; speculative currency transactions.

Notes

Literature

• D. Yu. Piskulov " Theory and practice of currency dealing».

see also

International monetary systems and exchange rate regimes
Monometallism / Bimetallism
Fixed / Floating rate
International currency systems
International financial organizations
Tools monetary policy
see also

Today the foreign exchange market electronic network, uniting the largest exchanges around the world. All trading participants must be registered, thus, an individual person will not be able to take part in trading on his own.

The exchange takes place on the interbank market, where system participants have the opportunity to carry out trading operations. If a person also wants to join the ranks of participants in the system, then he will need to use the services of a brokerage company. We can talk about two options for the functioning of the metabolic process:

• When all transactions are completed on the exchange

• When transactions are made, bypassing the exchange, on the interbank foreign exchange market

Functions of the foreign exchange market

Functions of the foreign exchange market for the global economy:

1. Supply and demand shape exchange rates
2. The function of protecting economic entities from speculative actions of various parties
3. Performs a function state instrument for carrying out monetary policy
4. Allows you to effectively make financial transactions (all kinds of payments in various currencies)

“Foreign exchange transactions” often mean the full cycle of exchanging one volume of a selected currency for another volume of a different type of currency, with the transfer of ownership of the given currency to the other side of the exchange. The foreign exchange market itself is a place that allows you to exchange one currency for another.

Functions of the global foreign exchange market:

1. The commercial function is to provide market participants with the currency for which there is a need
2. The value function allows you to maintain a balance between the world foreign exchange market and economic system in general, due to exchange rates
3. Information function informs all market participants about everything related to the functioning of the structure itself
4. The regulatory function contributes to taking into account the characteristics of all countries participating in the exchange in order to maintain the legality of actions

Risks in the foreign exchange market

Any trading operation made on the foreign exchange market is a transaction with high level risk. The constantly changing exchange rate of one or another instrument does not allow for guaranteed profitable foreign exchange transactions. Any buying or selling process may result in financial losses for the trading participant.

Hedging is often used to protect capital. This method allows you to control risks while protecting your investments. TO this method protection from financial losses all trading participants resort, including speculators, working on short-term changes in exchange rates, in order to make a profit from the difference in these rates.

Foreign exchange market participants

The main participants in the foreign exchange market are legal entities As a rule, these are banks, large investment funds, corporations. It is these participants who make up more than 80% of the total market turnover. The remaining interest is individuals, as a rule, making speculative transactions in the market, with the sole purpose of making money on the difference in currency rates. Such people work through brokerage companies, which, in turn, receive permission to directly access a particular exchange.

The following participants are involved in the market:

1. Central banks of various countries
2. Commercial banks
3. Currency exchanges
4. Brokers
5. Enterprises that need to receive one or another currency

Installed behind the foreign exchange market state control, which performs the function of regulating the entire process of interaction between the market and its participants, as well as between the trading participants themselves.

Market structure

If we talk about the exchange sector of the foreign exchange market, then this is trading within a separate exchange. The second option is the over-the-counter sector, which is an interbank exchange. The most common form of mutual settlements is cashless payment. In total, there are four types of foreign exchange markets: exchange, over-the-counter, futures and current.

The most significant in terms of trading volumes is the forward foreign exchange market. In turn, the derivatives market can be divided into futures, which is closest to traders, and forward. It is worth noting that when trading in the futures market, there is no actual delivery of currency as a result of the exchange.

World foreign exchange market as a structure:

1. Availability organizational mechanism supporting the functioning of the market.
2. Serving Global Trade
3. The currencies of various countries, in the process of forming their current value due to supply and demand, become objects of international market valuation

Market for speculators

For traders, the foreign exchange market is primarily their place of work. the main objective The goal pursued by a speculator is to make a profit by predicting the movement of a currency pair. The difference between the rates at the time of purchase and sale of a trading instrument is exactly the profit that a person can make for himself as a result of the transaction. Since the monetary turnover of individuals is too small, in most cases they work through brokerage companies.

Not long ago we published an article in which we talked about it, gave the basic concepts of this term, and analyzed its functions. One of the components of the global investment market is currency market, which we will talk about today.

I am sure that many of you have heard the term “foreign exchange market,” but not everyone fully understands what it is, how it can be useful, and why one should navigate these economic processes in general.

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Foreign exchange market: in simple words about complex concepts

If you look at Wikipedia, you can find the following definition:

« Currency market(English: Foreign exchange market, currency market) is a system of stable economic and organizational relations that arise when carrying out operations for the purchase and/or sale of foreign currency, payment documents in foreign currencies, as well as operations for the movement of capital of foreign investors"

Currency market very multifaceted. Many economists are still arguing about how to correctly interpret this concept. There are dozens, if not hundreds, of definitions of the foreign exchange market, each of which has its own characteristics. As they say, as many people as there are opinions. But no matter how you understand or interpret the concept of “foreign exchange market”, its essence will not change, it will still have clear functions and fulfill economically assigned tasks. In simple terms, the foreign exchange market is a place where investors, sellers and buyers of currency values ​​come to a certain consensus.

Maybe, this article would have been written much later, but the situation that is happening in the foreign exchange market of both Russia and Ukraine forced us to understand some concepts in more detail, to understand why significant jumps in the dollar and euro exchange rates occur, who influences these changes, how to save yourself from losing the value of money. Of course, it will be difficult to consider in one article general concepts, give an analysis of what is happening, and even delve into financial analytics. But we will try to provide answers to many questions that arise as concisely and informatively as possible.

Foreign exchange market: what is it?

As you already understand, the foreign exchange market is a system of special economic relations, which are built on the sale and purchase of currency values. This market has all the attributes of a regular market: subjects and objects, supply and demand, structure, communications, the price of goods, even its own speculators and dishonest players. The most important difference lies in the specific product. Here, the basis is the currency values ​​and the currencies of different countries of the world.

Modern currency markets did not arise by chance, but as a result of the evolution of society and economic relations. It is worth noting that transactions for the purchase, sale and exchange of currency existed back in ancient Rome, and in Rus' there were even special money changers who exchanged money, taking a small fee for it. But the first foreign exchange markets, which became the “great-grandfathers” of modern ones, appeared in the 19th century. Economists identify the following basic prerequisites for the formation of the foreign exchange market:

• Development and formation economic ties between different states
• The creation of an international monetary system, which was designed to regulate global monetary relations.
• The spread of lending not only among the population of a particular country, as well as lending from one state to another.
• Development banking system and interaction between banks of different countries
• The development of information technologies (telegraph, telephone), which allowed market participants to quickly communicate with each other, negotiate faster and reach agreements.

It all started with national currency markets, the development of which made it possible to form a world, global currency market, in which everyone, having completed certain conditions, could buy funds from the leading countries of the world.

It is clear that now the foreign exchange market has neither borders nor restrictions. The global Internet allowed participants to buy and sell currency in a matter of seconds, being in different parts of the world.

Foreign exchange market: main features, characteristics and functions

The foreign exchange market has certain features that distinguish it from other financial markets. Modern market characterized by the following features:

• Internationalization and use of all kinds of electronic means to work in the foreign exchange market. As mentioned earlier, the development of the Internet has made it possible to significantly speed up work on the foreign exchange market, and allow many people to trade foreign currency values ​​without leaving home.
• 24/7 continuous operation. The foreign exchange market is a mechanism that does not stop. It works always, at any time, in all parts of the world.
• Unification of all foreign exchange transactions
• Operations in the foreign exchange market are used for financial protection from all kinds of financial risks. To do this, use hedging.
• A huge number of speculative transactions that are aimed only at buying profitably and selling even more profitably. Moreover, they speculate not only large companies and huge banks, but also legal entities and individuals.
• Static exchange rates, which do not always depend on real economic indicators.

Currency market is a multifaceted and a complex system, which you won’t be able to figure out in a few days. Many experts have been studying the specifics of working with the market for years, the influence of certain factors on the exchange rate, the causes and consequences of sudden jumps and collapses. But if you become a specialist, this kind of work can bring in millions of dollars in a short period of time.

It is already difficult to imagine the functioning of the economy without the foreign exchange market. First of all, it ensures correct and uninterrupted economic cooperation between partner countries, but also performs a number of other functions:

• Ensuring timely international payments for financial obligations
• Creates opportunities to protect against currency and credit risks
• Thanks to the global foreign exchange market, the connection between the foreign exchange markets of different countries is ensured
• Creates opportunities for expanding foreign exchange reserves of states (purchases required quantity foreign currency).
• Regulation of exchange rates due to supply and demand
• The foreign exchange market makes it possible to implement the state’s foreign exchange policy, as component general economic policy development.
• Provides the opportunity to earn money by speculating on the growth and depreciation of currencies

Many people know about the foreign exchange market only thanks to the 7th function. But, as you can see, this is a very multifaceted concept, which, first of all, is intended to be a regulator and guarantor economic development and interaction between states and large international companies.

Foreign exchange market: who are the participants?

Like any other market, the foreign exchange market has its participants and subjects. These include:

1. 1. Central banks.

Central banks are the most important regulators of the country’s domestic foreign exchange market; they are responsible for the economic and financial stability. Central banks act as subjects of the foreign exchange market, buying and selling currency as needed.

1. 2. Commercial banks

Banks are hubs Money population of the country, carry out the bulk of foreign exchange transactions within the state. Many market participants have their own personal accounts in commercial banks, through which they purchase and sell various currency values.

We can say that banks are subjects of the foreign exchange market both directly, when they buy and sell currency, and indirectly, when through their accounts the purchase, sale, and exchange of currency belonging to individuals and legal entities is carried out.

Companies

Basically, these are international companies that cooperate with companies from other countries. Both importers and exporters of products need the currency of the country with whose companies they cooperate. This creates a certain supply and demand in the foreign exchange market.

By the way, jumps in the dollar exchange rate are, first of all, beneficial to those Russian companies who sell their goods in dollar price tags abroad, and pay their workers in rubles.

• International investment companies, pension and hedge funds, insurance companies.
• Currency exchanges

Many countries have their own domestic currency exchanges, designed to provide the country's population with the necessary demand for foreign currency. The state regulates the activities of these exchanges, because the overall economic situation in the country.

Currency brokers

These are people who buy and sell valuables on the foreign exchange market. Their main function is information about the buyer and seller, concluding an agreement and conducting a transaction. For such work, the broker takes a certain % of the transaction amount. But the amount of this commission is often less than the difference between the bank's loan interest and the bank deposit rate. Banks can also perform this function. In this case, they do not issue a loan and do not bear the corresponding risks.

Private individuals

These are the smallest participants in the foreign exchange market. Every person, when exchanging, buying and selling currency, is part of the global currency market. Even if the amount of transactions is relatively small, the total amount can constitute a very large part of all transactions carried out on the domestic foreign exchange market.

Operations carried out on the foreign exchange market

And the last thing I would like to understand is the operations that different participants can carry out on the foreign exchange market. The following basic operations can be distinguished:

Spot – foreign exchange transaction with immediate delivery

This term refers to the implementation of this type of operation that is carried out immediately. Banks undertake to deliver currency no later than the end of the second day after the conclusion of the transaction. Spot is very convenient if you need a large amount of money in a very short period of time. But such operations involve certain risk, because the exchange rate is a floating value, and if you buy today at one price, tomorrow, at the time of delivery, the price may fall significantly.

Using the “spot” operation, banks meet the needs of their clients in foreign currency, transfer capital, including “hot” money, from one currency to another, and carry out arbitrage and speculative operations.

Futures transactions with foreign currency

• Forward transactions. Their peculiarity is that the contract is signed in this moment, and the rate is fixed at the time of signing, but the delivery of the currency is planned for the future.
• Futures transactions. These are standard contracts that are signed on exchanges for buying and selling currencies. Futures have standard maturity dates. The most common is the three-month futures contract.
• Options. This financial instrument, which consists in the fact that the seller receives the right, but not the obligation, to sell a certain amount of currency in the future at a fixed price.
• Currency swap. This is an operation that combines simultaneously the purchase and sale of various currencies with immediate delivery.

Here we briefly reviewed the basic concepts regarding the foreign exchange market. As has been said more than once, the topic is very broad and multifaceted, therefore, within the framework of one article it is very difficult to analyze all possible aspects. We have given you a base, something from which you can begin to study the foreign exchange market on your own.

And at the end of the article we offer two quite interesting videos that will further expand your knowledge about foreign exchange markets, their structure, interaction, features of functioning and development.

We also recommend watching another rather interesting video about the foreign exchange market. We are sure that you will be able to discover new concepts for yourself, as well as find answers to dozens of questions regarding work and earnings in the foreign exchange market.

Currency market(in English currency market, money market) is:

• the sphere of economic relations manifested between market participants when carrying out conversion and credit and deposit operations in foreign currencies;
• a financial center where transactions for the purchase and sale of currencies are concentrated and based on supply and demand for them.
• a set of authorized banks, investment companies, brokerage houses, exchanges, foreign banks carrying out currency transactions;
• a set of communication systems connecting banks of different countries carrying out international currency transactions.

Functions of the foreign exchange market

1. Insurance from ;
2. Diversification;
3. Carrying out currency intervention;
4. Receipt of profit for their participants in the form of differences in exchange rates.

Foreign exchange market participants

• Central banks. Their function is to manage government foreign exchange reserves and ensure exchange rate stability. To implement these tasks, both direct foreign exchange interventions and indirect influence can be carried out - through regulating the level of the refinancing rate, reserve standards, etc.
• Commercial banks. They conduct the bulk of foreign exchange transactions. Other market participants hold accounts in banks and carry out through them the conversion and deposit and credit operations necessary for their purposes. Banks concentrate the aggregate needs of commodity and stock markets in currency exchange, as well as in attracting/placing funds. In addition to satisfying customer requests, banks can conduct operations independently at their own expense.
• Firms engaged in foreign trade operations. Total requests from importers form a stable demand for foreign currency, and from exporters - its supply, including in the form of foreign currency deposits (temporarily free balances in foreign currency accounts). As a rule, firms do not have direct access to the foreign exchange market and conduct conversion and deposit operations through commercial banks.
• International investment companies, pension and hedge funds, insurance companies. Their main task is diversified asset portfolio management, which is achieved by placing funds in securities of governments and corporations of various countries. In dealer slang they are simply called funds. This type can also include large transnational corporations that make foreign industrial investments: the creation of branches, joint ventures, etc.
• . In a number of countries, national currency exchanges operate, the functions of which include exchanging currencies for legal entities and forming a market exchange rate. The state usually actively regulates the level of the exchange rate, taking advantage of the compactness of the local exchange market.
• Currency brokers. Their function is to bring together the buyer and seller of foreign currency and carry out conversion or loan-deposit operations between them. For their intermediation, brokerage firms charge a brokerage commission as a percentage of the transaction amount. But the amount of this commission is often less than the difference between the bank's loan interest and the bank deposit rate. Banks can also perform this function. In this case, they do not issue a loan and do not bear the corresponding risks.
• Private individuals. Citizens carry out a wide range of operations, each of which is small, but in total they can create significant additional demand or supply: payment for foreign tourism; money transfers of wages, pensions, fees; purchases/sales of cash currency as a store of value; speculative currency transactions.

Classification of foreign exchange markets

Foreign exchange markets can be classified according to a number of criteria: by area of ​​distribution, in relation to foreign exchange restrictions, by types of foreign exchange resources, by the degree of organization.

By area of ​​distribution

International currency market covers foreign exchange markets of all countries of the world. The international foreign exchange market is understood as a chain of world regional foreign exchange markets closely interconnected by a system of cable and satellite communications. There is a flow of funds between them depending on current information and forecasts of leading market participants regarding the possible position of individual currencies. International is .

Domestic foreign exchange market- this is the foreign exchange market of one state, i.e. market operating within a given country. The domestic foreign exchange market consists of domestic regional markets. These include foreign exchange markets centered on interbank foreign exchange exchanges.

In relation to currency restrictions

Currency restrictions- this is a system government measures(administrative, legislative, economic, organizational) to establish the procedure for conducting transactions with currency values. Currency restrictions include measures to specifically regulate payments and transfers of national and foreign currency abroad.

A foreign exchange market with foreign exchange restrictions is called a captive market, and in the absence of them - a free foreign exchange market.

By types of exchange rates applied

Single-mode market is a foreign exchange market with free exchange rates, i.e. with floating exchange rates, the quotation of which is established at exchange trading. For example, official exchange rate The ruble is established using fixing.

In Russia, fixing is carried out Central Bank Russia on and represents the determination of the US dollar to ruble exchange rate.

The fixing rate is a single rate Central Bank Russia. Through it, using information about Reuters cross rates, he displays the exchange rate of the ruble to other currencies. Currency fixing occurs twice a week. On the day of currency fixing, the Central Bank of Russia reports the exchange rates of the leading freely convertible currencies to the ruble through publication in the media.

Dual regime foreign exchange market is a market with the simultaneous use of fixed and floating exchange rates. The introduction of a dual currency market is used by the state as a measure to regulate the movement of capital between the national and international loan capital markets.

This measure is designed to limit and control the influence of the international loan capital market on the economy of this state. For example, currently Vnesheconombank Russian Federation For foreign investment for blocked accounts for which settlements have not yet been fully completed, a fixed ruble exchange rate is applied, namely the commercial exchange rate established by the Central Bank of Russia.

By degree of organization

Exchange foreign exchange market is an organized market that is represented currency exchange y. A foreign exchange exchange is an enterprise that organizes trading in currencies and securities in foreign currency. The exchange is not commercial enterprise. Its main function is not to obtain high profits, but to mobilize temporarily free funds through the sale of currency and valuable papers in currency and in setting the exchange rate, i.e. her market value. The exchange foreign exchange market has a number of advantages: it is the cheapest source of currency and foreign exchange funds; applications submitted for exchange trading have absolute liquidity.

The liquidity of currency and securities in foreign currency means their ability to quickly and without loss in price turn into national currency.

Over-the-counter foreign exchange market organized by dealers who may or may not be members of the foreign exchange exchange and conduct it by telephone, fax, computer networks.

The exchange and over-the-counter markets to a certain extent contradict each other and at the same time complement each other. This is due to the fact that when performing general function for currency trading and circulation of securities in foreign currency, they apply various methods and forms of sale of currency and securities in foreign currency.

The advantages of the over-the-counter foreign exchange market are:

The low cost of currency exchange operations is sufficient. Bank dealers often use face-to-face currency auctions on the exchange to reduce their own costs for currency conversion by concluding agreements for the purchase and sale of currency at the exchange rate before the start of trading on the exchange. On the exchange, commissions are charged to trading participants, the amount of which is directly dependent on the amount of foreign currency and ruble resources sold. In addition, the law establishes a tax on stock exchange transactions. In the over-the-counter market, for an authorized bank, after a counterparty to a transaction has been found, the currency conversion operation is carried out practically free of charge;

Higher settlement speed than when trading on the currency exchange. This is primarily due to the fact that the over-the-counter foreign exchange market allows transactions to be carried out throughout the entire trading day, and not strictly certain time exchange session.

When classifying foreign exchange markets, one should distinguish the markets for Eurocurrencies, Eurodeposits, Eurocredits, as well as “black” and “gray” markets.

Eurocurrency market- is an international market for the currencies of countries Western Europe, where transactions are carried out in the currencies of these countries.

The functioning of the Eurocurrency market is associated with the use of currencies in non-cash deposit and loan transactions outside the countries issuing these currencies.

Eurobond market expresses debt obligations for long-term loans in Eurocurrencies, issued in the form of bonds of borrowers. The bond contains data on the amount of debt, the terms and conditions of its repayment, and the procedure for receiving interest in accordance with coupons. A coupon is a portion of a bond certificate that, when separated from it, entitles the owner to receive interest.

Eurodeposit market expresses stable financial relations on the formation of deposits in foreign currency in commercial banks of foreign countries at the expense of funds circulating on the Eurocurrency market.

Eurocredit market expresses stable credit ties and financial relations for the provision of international loans in Eurocurrency by commercial banks of foreign countries.

Currency market is a system of stable economic and organizational relations associated with transactions of purchase and sale of foreign currencies and payment documents in foreign currencies.

Foreign exchange markets can be classified according to the following criteria:

By type of operation . For example, there is a global market for conversion transactions (in it one can distinguish segments of conversion transactions such aseurodollaror dollar/yen), as well as the global market for credit and deposit transactions.

By territorial basis . It is customary to distinguish the following large markets: European, North American, Asian. They include large international monetary and financial centers: in Europe -London,Zurich,Frankfurt am Main,Parisetc.; in North America -NY; in Asia -Tokyo,Singapore,Hong Kong. We can talk about the existence of national currency markets (for example, the internal currency market of the Russian Federation), which are characterized by certain currency restrictions on the purchase, sale,lendingand making payments in foreign currency.

How the intersection of territorial markets and markets by type of transaction. For example, it is legitimate to talk about the existence of a European dollar marketdepositsor the Asian euro/Japanese yen conversion market.

foreign exchange market participants:

The main participants in the foreign exchange market are:

Central banks . Their function is to manage governmentforeign exchange reservesand ensuring exchange rate stability. To implement these tasks can be carried out as directcurrency interventions, and indirect influence - through regulation of the levelrefinancing rates, reserve standards, etc.

Commercial banks . They spend the main volumeforeign exchangeoperations. Other market participants hold accounts in banks and carry out through them the conversion and deposit and credit operations necessary for their purposes. Banks concentrate the aggregate needs of commodity and stock markets in currency exchange, as well as in attracting/placing funds. In addition to satisfying customer requests, banks can conduct operations independently at their own expense. carrying out foreign trade operations . Total requests from importers form a stable demand for foreign currency, and from exporters - its supply, including in the form of foreign currency deposits (temporarily free balances in foreign currency accounts). As a rule, firms do not have direct access to the foreign exchange market and conduct conversion and deposit operations through commercial banks.

International investment companies, pension And hedge funds, Insurance companies . Their main task is diversified asset portfolio management, which is achieved by placing funds insecuritiesgovernments and corporations of various countries. At the dealerslangthey are simply called funds.funds ). This type can also include largetransnational corporations making foreign industrial investments: creating branches, joint ventures, etc.

Currency exchanges . In a number of countries, national currency exchanges operate, the functions of which include exchanging currencies for legal entities and forming a market exchange rate. The state usually actively regulates the level of the exchange rate, taking advantage of the compactness of the local exchange market.

Foreign exchange brokers . Their function is to bring together the buyer and seller of foreign currency and carry out conversion or loan-deposit operations between them. For their intermediation, brokerage firms charge a brokerage commission as a percentage of the transaction amount. But the amount of this commission is often less than the difference betweenloan interestbank and the bank deposit rate. Banks can also perform this function. In this case, they do not issue a loan and do not bear the corresponding risks.

• Private individuals . Citizens carry out a wide range of operations, each of which is small, but in total they can create significant additional demand or supply: payment for foreigntourism; money transfers of wages, pensions, fees; purchases/sales of cash currency as a store of value;speculativecurrency operations.

Foreign currency purchase and sale transactions are carried out, firstly, between two authorized banks (this means that the Central Bank has issued them a license to conduct banking operations in foreign currency), secondly, by clients of the bank, entering into relationships with it (the bank).

It is prohibited to carry out transactions for the purchase and sale of foreign currency bypassing banks.

Based legal status Participants in the foreign exchange market, both banks (counterparties) and clients, distinguish between residents and non-residents.

Residents - these are individuals permanently residing on the territory of the Russian Federation, and legal entities created in accordance with the legislation of the Russian Federation and located on the territory of the Russian Federation.

Non-residents - these are individuals permanently residing abroad and legal entities created in accordance with the law foreign country and located on its territory.

The foreign exchange market operates in two areas:

• transactions are made on the foreign exchange exchange;
• transactions for the purchase and sale of foreign currency are carried out on the interbank foreign exchange market, when banks enter into relationships bypassing the exchange.

The functions of the foreign exchange market show the importance of the foreign exchange market for the economy:

servicing international turnover (payments) of goods, works, services;

the foreign exchange market forms the exchange rate under the influence of supply and demand;

the foreign exchange market acts as an instrument of the state (Central Bank of the Russian Federation) for conducting monetary policy;

The foreign exchange market acts as a mechanism to protect economic entities from currency risks and speculative transactions.

Onforeign exchange market a wide range of operations are carried out on foreign trade settlements, tourism, capital migration, insurance of foreign exchange expenses, diversification of foreign exchange reserves and the movement of foreign exchange liquidity, various measures of foreign exchange intervention are carried out, purchase and sale are carried out, exchange of foreign currency, checks, bills, cash settlements related to foreign trade, foreign investment, tourism, etc.

The main subjects of the foreign exchange market are large transnational banks and exchanges. The role of certain currencies onforeign exchange market determined by their place in international economic relations. Most of transactions are in US dollars, etc. for German marks, British pounds sterling, Japanese yen, French and Swiss francs. IN Lately International means of payment - ECU, SDR - are also included in circulation. Territorial foreign exchange markets are usually tied to large banking and currency exchange centers (London, Paris, New York, Singapore, Tokyo, Frankfurt am Main, etc.)

IN last years The Forex currency market (FOREX) is very popular in Russia.