Currency of a foreign state is the currency.
The market where foreign exchange transactions are carried out at the exchange rate is called the foreign exchange market.
The organized market, where the purchase and sale of currency is carried out, is called the currency exchange.
Moscow Interbank Currency Exchange is the largest in Russia.
The Belarusian Currency and Stock Exchange operates in Belarus.
What is a stock exchange rate? This is the exchange rate that is set at auction on the exchange.
Currency
It is bought and sold in the foreign exchange market, can be in a bank account, and used for international payments.
Currency is free, partially convertible and non-convertible.
Convertibility is the exchange ability of the national to foreign currency. Convertibility happens:
- external - in which non-residents of the state can buy or sell foreign currency;
- internal - in which this opportunity applies only to residents.
Freely convertible is a currency for which there are no restrictions in the field of legislation in order to make any currency transactions for residents and non-residents.
Partially convertible is a currency of states where there are any restrictions on its quantity or a special procedure governing and allowing a certain type of exchange transactions for different entities.
Non-convertible currency (closed) is a currency whose state legislation restricts virtually all operations.
Currency market
The foreign exchange market consists of a large number of different financial institutions, including large banks, which are interconnected by modern means of communication for conducting foreign exchange trading.
Thus, the foreign exchange market is not a specific place where sellers of currency and its buyers gather. Here dealers communicate with each other. Each computer displays quotes for the main currencies that banks trade. The bank is free to buy or sell currency on its own or on behalf of the client.
Since 1992, Russians have gained the right to open bank accounts in foreign currency. The exchange rate was pegged to the dollar, and later to the euro.
Currency trading is carried out by exchange and over-the-counter instruments.
Currency Exchange
An exchange market is an organized currency market that has the cheapest currency with liquid bids.
The final chapter will examine what the exchange rate is.
The liquidity of a currency means its ability to turn into money quickly and without loss.
Compared to OTC, the stock market has several advantages. It:
1. Equality of entities that sell and buy currency through intermediary banks. Applications regardless of the amount are held at the same rate.
2. The benchmark for government rates are unofficial exchange rates.
3. Currency interventions, like other ways of regulating exchange rates on the exchange, are more affordable and less expensive than in the international currency market. Here, the Central Bank can interfere in the course of trading to manage the course during crises. Russians are observing this effect on exchange rates in Russia in the current period of instability.
4. Technical and legal standards when conducting currency transactions.
5. Transparency and thus obtaining the opportunity to conclude transactions at the optimal quotation.
6. Currency risks are minimized, and settlement of transactions is guaranteed.
Moscow Interbank Currency Exchange (MICEX)
The largest currency exchange in Russia is the MICEX.
The Moscow Exchange is an exchange that has a license from the Central Bank of the Russian Federation, which allows organizing the purchase and sale of currencies for rubles and settling transactions.
The main objective of the exchange is to create the necessary conditions for the operation of the interbank foreign exchange market.
Bidding is held every day, excluding Saturday and Sunday. Operations are carried out through dealers who cannot conduct them themselves and at their own expense.
It conducts tenders and determines the current rate specially authorized for this purpose, the MICEX employee - exchange broker.
In the room where exchange trading is held, only MICEX employees and dealers, as well as organizations and participants in the trading, may be present.
The press and other organizations may be allowed into the hall only with the permission of the exchange management.
Belarusian Currency and Stock Exchange (BCSE)
BCSE - was established in 1998, but began operating almost from 1993. The controlling stake in the exchange belongs to the National Bank of Belarus, which is the main player in regulating the exchange rate of currencies in Belarus through daily interventions.
After the trading day, the ratio of supply and demand for currencies is visible, upon exceeding which the National Bank buys or sells currency at its discretion. For the same indicators, the ruble exchange rate of Belarus is being formed.
What is the exchange rate
The exchange rate is the price of a unit of money of one country, which is expressed in units of money of other countries. It is established relative to the supply and demand of the currency.
However, for professionals who exchange currency at the exchange rate, there is no orientation to the concept of exchange rate. For them, two courses are important, on which he, in fact, breaks up. This is the course of the seller and the buyer.
Quotation - the rate fixed in the national unit of money in foreign currency.
What is a stock exchange rate? This is the exchange rate that is set at auction on the exchange.
All foreign exchange transactions carried out on the exchange are based on the currency convertibility to be exchanged. Unofficial exchange rates of exchange directly depend on buyers, as far as they are ready to implement currency exchange. And this ability is determined based on the economic situation in the issuing countries.