(Various Participants in the Forex Market)
Forex which is considered to be the biggest market in terms of market capitalization with an estimated transactions of $5 Trillion performed every day.
Various Participants in the Forex Market
- Governments:
- The economic stability of a country is reliant on the value of its currency. The government is accountable to the economic stability of a country, monitors the forex market.
- Central Banks:
- Central Banks being the major consultant to the government on economic issues influences the forex market by participating in it.
- Banks:
- Banks which deal with cross-border transactions are one of the major participants in the forex market as they invest large sums of money on the exchanges to maximize profits from the liquidity of the forex market.
- Financial Institutions:
- Financial institutions which are engaged in the business of dealing with monetary transactions such as deposits, loans, investments and currency exchanges are also involved in the forex market.
- Companies:
- Multi-National Companies (MNCs) have their presence in multiple countries, and they resort to the forex market to transfer funds to it subsidiaries in different countries
- Hedge Funds:
- Hedge funds are alternative investments using pooled funds that employ different strategies to earn returns for their investors. Hedge funds manage derivatives and leverage in both domestic and international markets hence automatically being a player in the Forex market.
- People:
- Common people invest in Forex due to its sheer size with an aim to make profits from the variations in the market. George Soros is a celebrated investor in the forex space.