Indian Foreign Exchange Market: Crude Oil price fluctuation and Foreign Exchange Volatility
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Transcript of Indian Foreign Exchange Market: Crude Oil price fluctuation and Foreign Exchange Volatility
Indian Foreign Exchange Market
Presenting Contents• Indian Foreign Exchange Market• Determinants of Exchange Rates• Forex Volatility• Crude Oil• Why India?
Indian Foreign Exchange Market
Regulated by the Reserve Bank of India through the Exchange Control Department
Annual turnover - $400 billion Main centre - Mumbai Other centres - Kolkata, New Delhi, Chennai, Bangalore, Pondicherry
and Cochin Regulated by the Foreign Exchange Management Act, 1999 or FEMA Until 1973 - Foreign Exchange Regulation Act ,1947 or FERA Until 1999 - Foreign Exchange Regulation Act,1973 and gradually, this
act became as FEMA
Determinants of Exchange Rates• Balance of trade • External Dept • Terms of Trade• Inflation• Interest Rates • Govt. Dept to GDP• IND Govt. External Debt
Determinants of Exchange Rates - Balance of trade
Determinants of Exchange Rates - External Dept
Determinants of Exchange Rates – Terms of Trade
Determinants of Exchange Rates - Inflation
Determinants of Exchange Rates- Interest Rates
Determinants of Exchange Rates- Govt. Dept to GDP
Determinants of Exchange Rates – IND Govt. External Debt
Determinants of Exchange Rates – Balance of Trade Comparison
Forex Volatility• Theoritical Understanding• Exchange Rate: INR_USD & INR_GBP• Volatility Comparison
Forex Volatility – Theoritical Understanding
• Devaluation and Revaluation
Devaluation refers to a purposeful or even premeditated decline in value of a currency in relation to other currencies. Most of the time, these devaluations are demanded by government entities.
• Depreciation and Appreciation
There are also occasions when the value of a foreign currency changes due to market fluctuation rather than through purposeful intervention by a government's central bank. When these occur, they are described as the currency either appreciating or depreciating.
Forex Volatility – INR_USD & INR_GBP
Forex Volatility - Comparison
Crude Oil• Demand• Price Fluctuation
Crude Oil - Demand
Crude Oil – Price Fluctuation
Should we consider India?
Why India?• Indian GDP• Present Ranking• Estimated Ranking
Why India? - Indian GDP
Why India? - Present Ranking
Why India? – Estimated Ranking
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