In India, foreign exchange has been given a statutory definition. Section 2 (b) of Foreign Exchange Regulation Act, 1973 states:
‘Foreign exchange’ means foreign currency and includes:
All deposits, credits and balances payable in any foreign currency and any drafts, traveler’s cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency,
Any instrument payable, at the option of drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other.
For India we can conclude that foreign exchange refers to foreign money, which includes notes, cheques, bills of exchange, bank balances and deposits in foreign currencies.
The Rupee was historically linked with Pound Sterling. India was a founder member of the IMF. During the existence of the fixed exchange rate system, the intervention currency of the Reserve Bank of India (RBI) was the British Pound; the RBI ensured maintenance of the exchange rate by selling and buying pounds against rupees at fixed rates.
The inter-bank rate therefore ruled the RBI band. During the fixed exchange rate era, there was only one major change in the parity of the rupee- devaluation in June 1966.
According to John E. Rule, it is the views of participants in the foreign-exchange markets that result in the daily buying and selling pressures on currencies. The views of these participants, such as traders, bankers, and businessmen, are in turn influenced by political, economic and psychological factors.
‘Foreign exchange’ means foreign currency and includes:
All deposits, credits and balances payable in any foreign currency and any drafts, traveler’s cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency,
Any instrument payable, at the option of drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other.
For India we can conclude that foreign exchange refers to foreign money, which includes notes, cheques, bills of exchange, bank balances and deposits in foreign currencies.
The Rupee was historically linked with Pound Sterling. India was a founder member of the IMF. During the existence of the fixed exchange rate system, the intervention currency of the Reserve Bank of India (RBI) was the British Pound; the RBI ensured maintenance of the exchange rate by selling and buying pounds against rupees at fixed rates.
The inter-bank rate therefore ruled the RBI band. During the fixed exchange rate era, there was only one major change in the parity of the rupee- devaluation in June 1966.
According to John E. Rule, it is the views of participants in the foreign-exchange markets that result in the daily buying and selling pressures on currencies. The views of these participants, such as traders, bankers, and businessmen, are in turn influenced by political, economic and psychological factors.