Understanding Exchange Rates -Forex Basics- TYBMS / TYBBI International Finance

This lecture is a part of Quick Revision Series of International Finance.

Good morning everyone i’m professor savita bouquet and today we are going to start with the international finance international finance is one of the most interesting and scoring subject in your tyb ms finance in today’s lecture we are going to understand regarding the exchange rates now over here they have given you a currency pair of usd inr sixty eight point

One six one zero slash sixty eight point one six one five it means that suppose if you want to buy one us dollar how much indian rupees you have to spend or if you want to sell the us dollars how much indian rupees you are going to get that they have specified in this transaction please remember that whatever the currency they have given you at the first position

That is a base currency that is nothing but your foreign currency whatever the currency they have given you at the second position that is always a variable currency and that is your home currency now they have given you the two rates over here always the first rate will be your bit rate bit rate means a buying rate it is very easy to remember that b stands for

The bed b stands for the buying so if that is a bit rate means it is a buying rate and the second rate they have specified that is always called as the ask rate ask rate is the selling rate but please remember that this both buying and selling rate are from your bank’s point of view if the bank wants to buy the sixty eight point one six one zero is the applicable

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Rate and if the banks want to sell then sixty eight point one six one five is the applicable rate the bank is always going to buy at the lower rate and they are going to sell at the higher rate but for the individual that will be totally opposed it now i am planning to go for the vault or in the coming vacation so i require the us dollar but from where i am going

To purchase this us dollar definitely from the bank so banks selling rate that sixty-eight point one six one five that will be the buying rate for me and after the tools suppose i will still have the few of the us dollars with me that i have to return back to the bank so banks buying rate will become the selling rate for me means for the world tour i am going

To buy us dollars at a rate of sixty eight point one six one five and i am going to sell the us dollars to the bank at the sixty eight point one six one zero so you have to remember that the bank will always buy at the lower price and they will sell at a higher price but for the individual it will be totally opposed it the individual is going to purchase the

Currency at the higher rate and they are going to sell the currency at the lower rate i hope that this concept is clear to all of you so keep watching my further lectures for the more guidance on the international channels like and subscribe to my channel below for this module in illumination and my lectures ey bms exam

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Transcribed from video
Understanding Exchange Rates -Forex Basics- TYBMS / TYBBI International Finance By Savita Bodke