University of Mumbai Ruchi Joshi _ Eco Sem 2nd
Transcript of University of Mumbai Ruchi Joshi _ Eco Sem 2nd
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
1/7
UNIVERSITY OF MUMBAI
PROJECT ON
EXCHANGE RATE RISK
(ECONOMICS)
MASTER OF COMMERCE (BANKING AND FINANCE)
SEMESTER 2
2013-14
In Partial Fulfillment of the Requirement under Semester Based Credit
and Grading System for Post Graduates (PG)
Programme under Faculty of Commerce
SUBMITTED BY
RUCHI JOSHI
ROLL NO: 39
PROJECT GUIDE
Ms. Mrunalini Ravalekar
K.P.B. Hinduja College of Commerce, 315 New Charni Road,
Mumbai-400004.
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
2/7
M.COM (BANKING & FINANCE)
2nd
SEMESTER
EXCHANGE RATE RISK
SUBMITTED BY
RUCHI JOSHI
ROLL NO: 39
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
3/7
CERTIFICATE
This is to certify that Ms. RUCHI JOSHI of M.Com.Banking and Finance Semester 2nd [2013-
14] has successfully completed the Project on EXCHANGE RATE RISK under the guidance
of Ms.Mrunalini Ravalekar.
Project Guide _______________
Course Coordinator ________________
Internal Examiner _______________
External Examiner ________________
Principal _______________
Date: _______________
Place: Mumbai
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
4/7
DECLARATION
I Ms. RUCHI JOSHI the student of M.Com-Banking and Finance, 2nd Semester [2013-14],
hereby declare that I have completed the project on EXCHANGE RATE RISK.
The information submitted is true and original to the best of my knowledge.
RUCHI JOSHI
(Signature)
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
5/7
ACKNOWLEDGEMENT
With great pleasure I thank My Project Guide Mrunalini Ravalekar as well as Coordinator of
K.P.B Hinduja College of Commerce Dr. (Ms.) Minu Madlani, for being an inspiration in the
completion of this project.
I thank them for their invaluable help provided during the completion of this project.
I also thank them for providing me guidance and numerous suggestions throughout the project.
I am thankful to the librarians who gave me full support with the available resources.
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
6/7
EXECUTIVE SUMMARY
The exchange rate is a key financial variable that affects decisions made by foreign exchange
investors, exporters, importers, bankers, businesses, financial institutions, policymakers and
tourists in the developed as well as developing world. Exchange rate fluctuations affect the value
of international investment portfolios, competitiveness of exports and imports, value of
international reserves, currency value of debt payments, and the cost to tourists in terms of the
value of their currency. Movements in exchange rates thus have important implications for the
economys business cycle, trade and capital flows and are therefore crucial for understanding
financial developments and changes in economic policy.
The study covers two main topics: first, various aspects of economic policy with respect to the
exchange rate, and second, modeling and forecasting the exchange rate. Accordingly, the study
analyses Indias exchange rate story and discusses the structure of the foreign exchange market
in India in terms of participants, instruments and trading platform as also turnover in the Indian
foreign exchange market and forward premia. The Indian foreign exchange market has evolved
over time as a deep, liquid and efficient market as against a highly regulated market prior to the
1990s. The market participants have become sophisticated, the range of instruments available for
trading has increased, the turnover has also increased, while the bidask spreads have declined.
This study also covers the exchange rate policy of India in the background of large capital flows,
The study then attempts to develop a model for the rupee-dollar exchange rate taking into
account variables from monetary and micro structure models as well as other variables including
intervention by the central bank.
-
8/12/2019 University of Mumbai Ruchi Joshi _ Eco Sem 2nd
7/7
INDEX