How does interbank foreign exchange trading work? What is being traded in the interbank part of the foreign exchange markets? What functions does it serve?
What will be an ideal response?
POSSIBLE RESPONSE: A little more than 40 percent of foreign exchange trading is among banks themselves. Demand deposits denominated in different currencies are being traded where each deal is between a foreign exchange trader at one bank and a trader at a different bank, not a trade with an "outside" customer. Quoted interbank rates are for amounts of $1 million or more. Interbank trading serves several functions. Participation in the interbank part of the market provides a bank with continuous stream of information on conditions in the foreign exchange market. Interbank trading allows the bank to readjust its position quickly and at a low cost. It allows the bank to take on a speculative position quickly.
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________ usually increase(s) when the U.S. economy is in a recession and decrease(s) when the U.S. economy is expanding
A) Net Exports B) Consumer spending C) Unplanned investment D) Planned investment
Which of the following statements concerning efficiency is correct?
A. If a toll road is heavily used so that traffic movement is slowed, the price per vehicle should be reduced since the road is generating more revenue. B. Economists advocate high prices for abundant resources and low prices for scarce resources. C. If a toll road is heavily used and traffic movement is difficult, the price per vehicle should be increased to shift some traffic to less-crowded roads. D. All of these options are desirable in promoting efficient use of scarce road space.