S.

K SOMAIYA DEGREE COLLEGE OF ARTS,SCIENCE AND COMMERCE AUROBINDO,VIDYANAGAR VIDYAVIHAR(E) MUMBAI 400077 DECLARATION BY THE STUDENT I, RESHMA V. MALI, the student of M.Com Banking & Finance part I (2012-13),Roll no-33 hereby declare that the project for the paper Economics Of Global Trade And Finance titled, SIGNIFICANCE OF FOREIGN EXCHANGE RESERVES Submitted by me for Semester-II during the academic year 2012-13,is based on actual work carried out by me under the guidance and supervision of Dr.(Prof.) C.V. Hari Narayanan. I further state that this work is original and not submitted anywhere else for any examination.

SIGNATURE OF STUDENT

S.K SOMAIYA DEGREE COLLEGE OF ARTS,SCIENCE AND COMMERCE AUROBINDO,VIDYANAGAR VIDYAVIHAR(E) MUMBAI 400077 EVALUATION CERTIFICATE This is to certify that undersigned have assessed and evaluate the project on SIGNIFICANCE OF FOREIGN EXCHANGE RESERVES,submitted by RESHMA V. MALI, Student of M.Com part I. This project is original to the best of our knowledge and has been accepted for Internal Assesment.

Internal Examiner External Examiner Dr.(Prof.) C.V.Hari Narayanan Prinipal Dr.Sangeeta Kohli

ACKNOWLEDGEMENT I would sincerely like to give my heartfelt acknowledgement and thanks to my parents.Any amount of thanks given to them will never be sufficient. I would sincerely like to thanks our principal Dr.Sangeeta Kohli.I would also like to thank my project guide Dr.(Prof.)C.V.Hari Narayanan for his valuable support and guidance whenever needed. I also feel heartiest sense of obligation my library staff members & seniors who helped in colletion of data and materials and also in this processing as well as in drafting manuscript. Last,but not the least, I would like to thank my friends & colleagues for always being there.

(RESHMA V. MALI)

Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

INDEX Index Introduction of foreign exchange reserves History of foreign exchange reserves in india Foreign exchange Restriction Factors affecting the exchange rate of Indian Ruppes Different types of transactionsin the FER Management of foreign exchange risk Major participants in forex market Purpose of Holding foreign exchange reserve How to cover foreign exchange risk Foreign exchange risk Tyes of foreign exchange market. Indias forex reserves 4th largest in world survey How to avoid foreign exchange risk What makes foreign trade unique Are Indias foreign exchange reseves sonnd? Acquisition of foreign exchange Conclusion Bibilography

Page No. 1 4 7 10 13 15 20 23 19 24 27 28 29 31 32 36 42 43