Dept. of Commerce, Mangalore University, Konaje-574199.
An efficient international monetary system is a necessary pre-condition for the smooth functioning and expansion of international business. The trading of currencies takes place in foreign exchange market whose primary function is to facilitate international trade and investment. Currency fluctuation may affect adversely the price realization for the exporter and the price of raw materials for the importer. Exports provide the market support for country's surpluses and generate foreign exchange earning which increase country's capacity to import other goods. Exports receivables of ten sold forward at the then prevailing exchange rate applicable to forward contracts. The country's financial health will be determined on its foreign reserves. Foreign exchange earning is one of the fundamental concepts in foreign exchange market. Exporters are the main contributors to the country's foreign reserves.
