FOREIGN EXCHANGE MARKET

Foreign Exchange Market

• Foreign exchange earned through foreign direct investment in India can be used to remove the poverty and other productive purposes. Inflow of foreign exchange increases the scale of production and national income of the country. With the rise in the demand of domestic goods, resources of a country are fully utilized and it helps in reducing the unemployment in a country. 
• Foreign exchange (forex) markets provide traders with a lot of flexibility. This is because there is no restriction on the amount of money that can be used for trading. Forex markets provide traders with a wide variety of trading options. They have the choice of entering into spot trade or they could enter into a future agreement. 
• Futures agreements are also available in different sizes and with different maturities to meet the needs of the Forex traders. Therefore, Forex market provides an option for every budget and every investor with a different appetite for risk taking.
•  Further, the Forex market is transparent in comparison to other financial market as it is huge in size and operates across several time zones. Information regarding Forex markets is easily available. Also, it is almost impossible to rig prices in the foreign exchange market for an extended period of time.