FOREX and Services
High growth Indian economy coupled with globalization has resulted in thousands of Indians going abroad for travel, studies and businesses. Simultaneously, there is a huge inflow of foreign tourists visiting India on vocation and business. For this there is a need for a reliable and quality service provider for purchase and sale of Foreign Exchange.
Foreign Exchange or Forex refers to an over-the-counter market where buyers and sellers conduct foreign exchange transactions by telephone and other means of communication. It is the exchange of one currency for another or the conversion of one currency into another currency. It also refers to the global market where currencies are traded virtually around-the-clock. The Forex market is the largest, most liquid market in the world with an average traded value that exceeds $4 trillion per day and includes all of the currencies in the world. It is useful because it enables trade and transactions between countries, and it also allows an investment opportunity for risk seeking investors who don’t mind engaging in speculation.Individuals who trade in the Forex market typically look carefully at a country’s economic and political situation, as these factors can influence the direction of its currency. One of the unique aspects of the Forex market is that the volume of trading is so high, partially because the units exchanged are so small.
A foreign exchange transaction encompasses everything from the conversion of currencies by a traveler at an airport kiosk to billion-dollar payments made by corporate giants and governments for goods and services purchased overseas. Every Forex transaction requires reliable, affordable and convenient Forex services. At many places, there is no Bank or other facilities to avail foreign exchange. India Post, with a network of more than 155,000 post offices, is best poised to offer Forex services in an efficient and economical manner. At the same time, private advisory firms help in relieving the corporate from the responsibility of constantly monitoring forex markets and enable them to concentrate on their core business areas.
Companies which are in the foreign trade are exposed to the risk of fluctuation in exchange rates and interest rates as their cash flows and profitability are inseparably linked to these factors. The risk is accentuated because the underlying variables, namely currencies and interest rates are volatile and dependent on a host of macro-economic and political factors.
Forex Products & services:
Given below is the range of Forex services offered from the Post office counters and subject to the regulations of Reserve Bank of India:
|Foreign currency notes (FCN)
India Post offers banknotes of the currencies: US Dollars, Sterling Pound, Euro, Australian Dollar, Bahrain Dinar, Canadian Dollar, Danish Kroners, Hong Kong Dollar, Japanese Yen, Kuwait Dinar, Malaysian Ringtt, New Zealand Dollar, Norwegian Kroner, Oman Rial, Qatar Rial, South African Rand, Saudi Rial, Singapore Dollar, Swedish Kroner, Swiss Francs, Thai Bhat and U.A.E. Dirhams.
|Buying and selling|
|Travellers Cheques (TC)
The American Express Travelers Cheques offered by India Post include: US Dollar, Sterling Pound, Euro, Australian Dollar, Canadian Dollar and Japanese Yen.
|Buying and selling|
|Store Value Card (SVC)
India Post offers Store Value Card for: US Dollar, Sterling Pound, Euro, Australian Dollar, Canadian Dollar, Japanese Yen and Swiss Francs.
|Arrangement for Demand Drafts (DD)
India Post also offers its customers draft issuances in the given currencies: US Dollar, Sterling Pound, Euro, Australian Dollar, Canadian Dollar, Japanese Yen, Swiss Francs, Danish Kroners, Hong Kong Dollar, UAE Dirham and Singapore Dollar.
|Arrangement for Telegraphic/wire transfers(TT/WT)
INDIA post also offers its clients Wire Transfer Facility in the following currencies: US Dollar, Sterling Pound, Euro, Australian Dollar, Canadian Dollar, Japanese Yen, Swiss Francs, Danish Kroners, Hong Kong Dollar, UAE Dirham and Singapore Dollar.
In what is arguably one of the most volatile markets, timeliness and relevance of information holds the key to effective decision-making. Information about the movements and trends in the Forex market is all the more crucial because it has direct impact on the bottom line of the corporate. Accurate and timely information is not only a facilitator to decision making but also goes towards ensuring that the corporate is obtaining the rates in line with the market. Reports by advisory firms, thus, encompass all possible information about the Forex market and the money market along with the fundamental and technical analysis.The importance of good, solid and reliable market information is extraordinarily valuable when it comes to dealing in the Forex market, and even more important when small variations may impact heavily on the entity’s profitability.
Forex advisory services include assisting corporates right from the stage of drawing up Forex risk management policies, proceeding to setting up benchmark costing levels for transactions and managing Forex risk through various hedging strategies. The sole purpose is to provide corporate with all the inputs and advice needed for them to take an informed decision through the following: