Investing in Foreign Currency: Is it a Viable Option for Indian Investors?

By admin_mutual | Aug 01, 2023

Investing in FOREX or foreign exchange is a very popular investment strategy for investors in India. Also often referred to as foreign currency, it offers lucrative options for investors as the global marketplace makes it possible for them to trade and invest in foreign currencies. The exchange rate of the different foreign currencies is determined by the global marketplace and it is a sphere where different types of participants like buyers, sellers, speculators and exchangers take part. These people trade in numerous currency pairs so that profits can be made on the ever-changing exchange rates.

Basic aspects of the foreign exchange market

Multiple financial entities take part in the foreign exchange market, namely banks, forex dealers, commercial companies, central banks, investment firms, retail investors and hedge funds. These entities regularly buy and sell different types of foreign currencies. Another function of the foreign exchange market is to convert currencies for carrying out international trade investments as well as settlements.

Advantages of investing in the foreign exchange for Indian investors

There are many salient advantages of investing in the foreign currencies for an investor in India. These are mentioned below in brief.

• One of the best things about the foreign currencies market is that it is very flexible and there are fewer rules that define their operations and functioning. This is something that attracts the investors in India as they love to manage their orders and investments easily without having to follow the strict standards and rules associated with traditional investments in India.
• The foreign exchanges and currencies do not involve any commissions or fees that are to be handled by the traders.
• Since the market is open 24/7, investors can invest any time they want.
• Unlike some of the other types of marketplaces, there is hardly any cut-off time for the traders and investors to take part in the market. Hence investors can trade and invest any time they want.
• Another great thing about the foreign currencies market is that it always has high liquidity. This means that they traders can get in and come out within a short span of time.
• The foreign exchange market is completely transparent which means that there is little chances of corruption or market manipulation involved. This is yet another reason as to why it is a good idea for Indian investors to invest in foreign currencies at any given time of the year.