Foreign Exchange Management

Paper Code: 
MFM 423
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Objectives-

1. Paper has been designed such that it acquaints the students with the recent trends in the foreign exchange market.

2. To introduce the students about the methods of payment in international trading

Course Outcomes (COs): 

 

Learning outcomes

(at course level)

Learning and teaching strategies

Assessment

Strategies

  
 

CO 141: Understand the operation of foreign exchange market.

CO 142: Understand the theories and determination of foreign exchange rates.

CO 143: To introduce the students about the methods of quotations in exchange rate transaction.

CO 144: To introduce the students about the methods of payment in international trading.

 

CO 145: To introduce the students with the concept of Balance of payment.

 

Approach in teaching:

Interactive Lectures using whiteboards, Discussion, Tutorials, Reading assignments, Demonstration, Team teaching, Quiz.

 

Learning activities for the students:

Self learning assignments, Effective questions, Solving problems of unsolved questions, Problem based learning-cases, Group learning teamwork, Giving Tasks.

 

 

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation, Individual and group projects

  

 

12.00
Unit I: 
Foreign Exchange market

Meaning, Features, functions, participants in foreign exchange market methods of affecting international payments, dealings on the Foriegn Exchange Market- Spot and Forward Exchanges, Forward Exchange Rates, Futures, Options, Swap Operation.

12.00
Unit II: 
Foreign Exchange Rate

Concept, factors determining spot exchange rates, fluctuations in the rate of exchange, Types of Exchange Rate: Fixed &  Flexible  exchange rate.

Theories of exchange Rate: Demand and supply theory of exchange rate, PPP Theory, Balance of Payment theory.

12.00
Unit III: 
Exchange Control:

Meaning, features, Objectives, Methods- Unilateral methods & Bilateral methods, Merits and demerits, Exchange Control in India, Exchange Control Authority- Authorised dealers, Foreign Exchange Dealers Association of India(FEDAI), Foreign Exchange Reserves in India.

12.00
Unit IV: 
Balance of Payment:

Concept, Structure, Components of Balance of Payment,  Difference between Balance of trade and Balance of Payment, Equilibrium in BOP, Disequilibrium in BOP, Types of Disequilibrium ,  Measures to correct disequilibrium.

12.00
Unit V: 
Methods of Payment:

Letter of Credit – meaning, mechanism, evaluation of LOC, Types of LOC. Bills of Exchange- meaning, Types of bills, noting and protest, stamp duty.

Introduction to International Monetary fund (IMF)

Essential Readings: 

•

  • C. Jeevanandam , “Foreign exchange and risk management” ,Sultan Chand
  • Francis Cherunilam ,”International trade and export management “, Himalaya publication.
  • OP Agarwal, “Foreign trade and foreign exchange” Himalaya Publication House, Mumbai
  • Avadhani,V.A,”International Finance, Theory and Practice”Himalya Publishing company, New Delhi.
  • S.K.Mathur,”International Trade and Finance” Shivam Book House, Jaipur.
  • Cherunilam Francis,” International Business”,Tata Mc Graw-Hill Publishing Co. Limited New Delhi.
References: 

• Wood and J Byrne: International Business finance, Macmillan, New York.
• Walter,Ingo: Handbook of International Business ,John Wiley and sons, New York.
• Mithani D.M., ”Introduction to International Economics” Himalaya publishing House, Mumbai.

Academic Year: 
2020-2021
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