FOREIGN EXCHANGE MANAGEMENT

Paper Code:

MFM 423

Credits:

Contact Hours:

60.00

Max. Marks:

100.00

Objective:

Course Outcomes

Learning and teaching strategies

Assessment Strategies

CO 166: Equip the students with proper knowledge about Foreign exchange

CO 167: Understand the operations of foreign exchange market.

CO 168: Examine the theories and determination of foreign exchange rates.

CO 169: Discuss general factors of exchange rate fluctuations.

CO 170: Explain nature, functions and participants of foreign exchange market

CO 171: Explain 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:

Unit-1

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

12.00

Unit II:

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:

Unit-III

Exchange Control:

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

12.00

Unit IV:

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:

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)

*Case studies related to entire topics are to be taught.

Essential Readings:

C. Jeevanandam ,“Foreign exchange and risk management”,Sultan Chand
FrancisCherunilam,”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,NewDelhi.
S.K.Mathur,”InternationalTradeandFinance”ShivamBookHouse,Jaipur

References:

Suggested Readings:

· Cherunilam Francis,” International Business”,Tata Mc Graw-Hill Publishing Co.Limited New Delhi.

· WoodandJByrne: International Businessfinance, Macmillan ,New York.

· Walter, Ingo:HandbookofInternationalBusiness ,John Wileyandsons, New York.

· Mithani D.M., ”Introduction to International Economics” Himalaya publishing House ,Mumbai.

E Resources:

· https://www.expresslibrary.mheducation.com/bookshelf

· Elibrary.in.pearson.com

· https://www.yourarticlelibrary.com/international-business

· https://www.investopedia.com/terms/m/internationalmarkets.asp

· https://www.slideshare.net/