Currencies trade under different systems regulated by their respective governments:
A detailed look at how banks calculate buying and selling rates for retail and corporate customers, factoring in exchange margins and transit periods. 2. Regulatory and Institutional Frameworks
C. Jeevanandam is a highly respected academic and former banking professional. He previously served as a faculty member at the Indian Bank Staff College in Chennai and as a Professor of Finance at the PSG Institute of Management. With over two decades of experience in both teaching and banking, his work effectively bridges the gap between academic theory and the practical realities of the financial industry. Core Themes of the Book
Long-term structural risk management and accessing cheaper foreign debt. 6. The Indian Regulatory Framework (FEMA & FEDAI)
The book begins with the basics—the sources and uses of foreign exchange, the role of banks as dealers, and the primary determinants of exchange rates.
Market forces determine the rate, but central banks intervene to stabilize extreme volatility. Exchange Rate Arithmetic and Quotations
To manage risk, one must first understand what drives currency movements. The book provides a granular breakdown of macro-economic theories:
: How banks make a profit on currency exchange by buying low and selling high.
Gives the buyer the right , but not the obligation, to trade a currency at a set price (strike price). Requires paying a premium up front.
: Computing exchange rates between two currencies using a common third currency.
By respecting intellectual property while aggressively pursuing knowledge, you build the discipline required to actually manage risk in the real world.
A deep dive into the difference between
Risk arising from transactions already entered into but not yet settled, where exchange rates might change before payment.
: Insights into the procedural aspects of banks and institutions, including the rules of FEDAI and the International Chamber of Commerce.
This section addresses the three main types of exposure— Transaction , Translation , and Economic exposure —and the financial instruments used to manage them, such as futures, options, and swaps.
Accelerating (leading) or delaying (lagging) payments based on expected currency movements. External Hedging Instruments (Derivatives)
Currencies trade under different systems regulated by their respective governments:
A detailed look at how banks calculate buying and selling rates for retail and corporate customers, factoring in exchange margins and transit periods. 2. Regulatory and Institutional Frameworks
C. Jeevanandam is a highly respected academic and former banking professional. He previously served as a faculty member at the Indian Bank Staff College in Chennai and as a Professor of Finance at the PSG Institute of Management. With over two decades of experience in both teaching and banking, his work effectively bridges the gap between academic theory and the practical realities of the financial industry. Core Themes of the Book
Long-term structural risk management and accessing cheaper foreign debt. 6. The Indian Regulatory Framework (FEMA & FEDAI)
The book begins with the basics—the sources and uses of foreign exchange, the role of banks as dealers, and the primary determinants of exchange rates.
Market forces determine the rate, but central banks intervene to stabilize extreme volatility. Exchange Rate Arithmetic and Quotations
To manage risk, one must first understand what drives currency movements. The book provides a granular breakdown of macro-economic theories:
: How banks make a profit on currency exchange by buying low and selling high.
Gives the buyer the right , but not the obligation, to trade a currency at a set price (strike price). Requires paying a premium up front.
: Computing exchange rates between two currencies using a common third currency.
By respecting intellectual property while aggressively pursuing knowledge, you build the discipline required to actually manage risk in the real world.
A deep dive into the difference between
Risk arising from transactions already entered into but not yet settled, where exchange rates might change before payment.
: Insights into the procedural aspects of banks and institutions, including the rules of FEDAI and the International Chamber of Commerce.
This section addresses the three main types of exposure— Transaction , Translation , and Economic exposure —and the financial instruments used to manage them, such as futures, options, and swaps.
Accelerating (leading) or delaying (lagging) payments based on expected currency movements. External Hedging Instruments (Derivatives)