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Forex Management
Forex Management
Forex Management
14
Functions Of Foreign Exchange Market
Transfer Function:
The main function is to facilitate the conversion
of one currency into another to accomplish
transfers of purchasing power between two
countries through credit instruments such as
telegraphic transfers, bank drafts, and foreign
bills.
Credit Function:
Provide credit to promote foreign trade.
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Hedging Function:
¥ 1000/ $ 10 = 1 US $ = 100 ¥
The ratio of one country’s price of a basket
of goods and services to another country’s
price of identical basket of goods and
services should be exchange rate of two
countries.
US $3.57 3.57 --
China Yuan 12.5 1.83 3.50 6.83 -49