Foreign Exchange Management

Paper Code: 
MFM 424
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

• Understand the operation of foreign exchange market.
• Understand the theories and determination of foreign exchange rates.
• To introduce the students about the methods of quotations in exchange rate transaction.
• To introduce the students about the methods of payment in international trading

12.00
Unit I: 
Foreign Exchange market:

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-

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:

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:

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:

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: 
2019-2020
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