BFM: Concepts and Practice · Part A: International Banking

Chapter 1: Exchange rates and forex business

How the rupee is priced, what moves it, and the rules a bank follows when it deals in foreign currency.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 1.1The forex marketp. 3
• 1.2Reading a quotep. 4
• 1.3What moves the rupeep. 5
• 1.4Exchange rate regimes and the rupeep. 6
• 1.5The dealing roomp. 7
• 1.6Merchant rates and FEDAIp. 8
• 1.7Hedging: derivatives and RBI’s rulesp. 9
• Exam traps and quick checksp. 10
• Practice: 16 questions in three roundsp. 11
• Answers, with every wrong option explainedp. 13
• Make it stickp. 15
• Chapter 1 on one pagep. 16

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.