Currency markets served by the international payment transactions related to the payment of monetary obligations of businesses and individuals around the world. The specificity of international payments is the lack of universally accepted for all countries payment. Therefore, a necessary condition for settlement of foreign trade, investment, intergovernmental payments is the exchange of one currency for another in the form of a purchase or sale of foreign currency by the payer or recipient. Currency markets - official centers where committed purchase and sale of currencies on the basis of supply and demand.
Capital market includes medium-and long-term loans, as well as stocks and bonds. It is divided into the stock market (medium-and long-term) and the market of the mid-and long-term bank loans. Capital market is an important source of long-term investments for governments, corporations and banks.
Foreign exchange market plays a significant role in the interaction between the various components of the global financial markets. This is the mechanism by which sets out the legal and economic relationships between consumers and sellers of currencies.
The main product of the currency market - is any financial requirements specified in foreign currency.
From the point of view of the market mechanism, a currency exchange - this exchange of one country's currency for another.
Demand deposits - are tools used in the trade between banks operating in the foreign exchange market. Bank dealers hold demand deposits in foreign currency in correspondent banks located in financial centers, where this foreign currency is internal.
The main participants of the currency market are banks, dealers and other banks, exporters, multinational companies, financial institutions, investors, government agencies, businesses and individuals. They all have a variety of needs, including the need to hedge open positions in the foreign exchange market, the need to invest in different areas of the world and send the purchasing power from one country to another.
Currency market consists of many national currency markets, which more or less integrated into the world system. This system allows the bank in a foreign exchange center to carry out transactions on the following basis.