Commercial banks
The main group of participants of the international currency market forex are commercial banks. It is they who conduct the bulk of foreign exchange transactions at their own expense and on behalf of customers. Other participants of the foreign exchange market keep their accounts in commercial banks and send them applications for the purchase and sale of one currency for another for their own needs (conversion operations), and also credit and vice versa keep their deposits (deposit-lending operations) in banks. Banks, being specialized organizations, accumulate (through transactions with customers) market needs (supply and demand) and if they are not able to meet these needs they themselves satisfy them through other banks. Therefore, in fact, it is not an exchange, in the strict sense, it is the market for interbank transactions (sometimes for interbank money). Commercial banks also conduct speculative operations at their own expense.
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Participants of the Forex market[/caption]Firms engaged in foreign trade operations
Firms carrying out import operations present demand for foreign currency (for the purchase of goods) and the corresponding offer of the national currency. Companies engaged in export operations create a supply of foreign currency (earned for the sale of goods) and the corresponding demand for the national currency needed to pay labour, other costs and taxes. In addition, they both place free currency balances on their accounts in deposits or securities or attract loans in various currencies, depending on interest rates and own expectations. As a rule, all these operations are done through commercial banks.
Funds and companies engaged in foreign investments
International investment funds, as well as large commercial corporations operating abroad, manage their own securities portfolio (for example, government bonds and bonds of private companies), denominated in different currencies or hold large deposits in commercial banks with the purpose of deriving profit from such investments.
Central Banks
The function of central banks is to maintain the smoothness of fluctuations in the exchange rate of the national currency, manage reserves in foreign currency, regulate refinancing rates and maintain the liquidity of the national market. The biggest impact on the market forex is provided by: The Federal Reserve System of the USA (US Federal Reserve or FED), as well as its Committee on Open Market Operations (Federal Open Market Committee, or FOMC), the European Central Bank (European Central Bank or the ECB) , the Bank of England (Bank of England - BOE, also called Old Lady) , the Bank of Japan (Bank of Japan or BOJ)
Currency exchanges
Currency is also traded on domestic national exchanges. In addition, a significant part of the standardized derivatives is traded on the exchanges: futures, options, etc.
Brokerage companies
Brokerage companies are engaged in the reduction of the buyer and seller of the currency in the event that between them there are still no stable counteragent agreements. For their brokerage, firms charge a brokerage commission, usually in the form of a percentage of the transaction amount.
Dealing centres, dealing companies
Dealing centres, play the role of peculiar intermediaries, working with small amounts of individuals and accumulating them for commercial banks.
Private individuals
Private individuals conduct a wide range of conversion and arbitrage transactions, demand for currency for tourism purposes, purchase of goods abroad, conversion of wages, etc., and conduct speculative operations.