Foreign Trade And Performance of Foreign Exchange In India

The Foreign Exchange Market or Currency Market is a global, worldwide decentralized over the counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekend. The Foreign Exchange Market determines the relative value of different currencies. The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. The relationship between currencies and trade has been the object of a wide policy debate in recent times. This study reviews part of the relevant academic literature that attempts to model and estimate the impact of exchange rate volatility and misalignments on international trade. The review, therefor abstract from other important factors that may have a (more or less direct) bearing on the relationship between exchange rates and trade, such as the factors behind the determination of exchange rates, the impact of exchange rate regimes, or the relationship between exchange rate policies and global imbalances. Significance of the study is very broader and covers both foreign trade and its comparison with currency market. The study will provide a very clear picture of the relationship between foreign trade and currency market on India. This would be helpful for further descriptive studies on the novel ideas that will be further explored. Moreover, it would be beneficial to gain knowledge regarding foreign trade, their process and their impact on currency market performance.