Purpose of Forex in Global Monetary System: Understanding its Economic Significance

The forex market is seen as being of paramount importance within the overall global financial structure. Situated in a wide range of participants, the market allows businesses and investors to convert one currency to another; the participants range from banks and commercial companies to central banks, investment management companies, and retail Forex brokers. This market allows liquidity exchange, desperately needed in a world economy where foreign currencies must be tapped. It is a gigantic global financial market in terms of trading volume, with trillions changing hands daily and the most liquid market. The liquidity of the market is essential for