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Give examples using current exchange rates of a currency appreciating in value compared to depreciating in...

Give examples using current exchange rates of a currency appreciating in value compared to depreciating in value.

What are the major segments of the foreign exchange market? Who are the participants in this market?

How are exchange rates determined? Use diagrams to supplement your answer.

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Answer #1

An example of currency appreciation is Us Dollar which has risen substantial against currency depreciation of Indian Rupee which has depreciated from 1UsD = 49 INR to 76 INR in 10 years.

Participants of forex markets are commercial banks, mutual fund houses, NBFCs, Central banks, Forex brokers, Retail Individuals and Institutional Buyers.

Segment include Spot market, forward market, Futhre market, Option market, Swaps market.

Exchange rste is determined based on supply and demand of currency in global markets.

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