What is Forex?
Forex is the shortened form of Foreign Exchange. Foreign exchange is the process of exchanging one currency for another currency. This is done to facilitate various dealings between countries, most common among which are trade, commerce, or tourism. Forex is also the generalized term used to refer to the Foreign Exchange Market. It is an over the counter exchange of currencies of different countries. These currencies are traded according to their demand. The foreign exchange market is the largest and most liquid market in the world. There’s an estimated $5.1 trillion worth of foreign exchange done daily all over the world. Forex is required when one travels from one country to another. The amount that can be carried depends upon the purpose of visit and should be in accordance with the Foreign Exchange Management Act (FEMA) 1999.
How it works?
The foreign exchange market is the place where forex is traded. It may not be useful for someone who has no reason to buy/sell forex exchange, for instance, a local organic farm owner who only supplies locally. However, for people who conduct overseas business or a local business with interests/partners in foreign countries, it makes a lot of sense. This is also true for tourists who are travelling to other countries. Let’s say you are planning a trip to Italy, then you would need the Euro there. There are a few ways to buy Euros for your trip. Either you can go to a bank and buy Euros in cash or get a Forex card. For both, you would be required to submit a copy of your passport, visa, & a copy of your air ticket. You have to fill out an A2 Form mentioning the purpose of your visit. The bank buys INR from you and sells you Euros, either in cash or loaded in a Forex card. And for this exchange, the bank charges a commission. Another way of getting Forex is through an authorized foreign exchange dealer. The paperwork remains more or less the same. Do make sure to compare the exchange rates at both places. If you intend on buying forex from a dealer in Mumbai, it is advisable to check the Euro buying rate in Mumbai online before you do. Veena World can help you with your forex currency cash needs with the best prices for the Euro rate in Mumbai. You can get in touch with one of our executives for the same. The Euro rate today in Mumbai might be different from yesterday, for the rate of Forex tends to fluctuate with market changes.
There’s no limit on the number of Euros that you can carry from India for your holiday overseas, provided it has been purchased from an authorized foreign exchange dealer as per norms. However, according to EU Regulation 1809/2005, if the amount of Euros in cash exceeds 10,000 Euros, you are under a legal obligation to declare it at customs.
While travelling abroad, a resident Indian can carry Indian currency (in cash) up to ₹25,000 and foreign currency notes or coins up to $3,000 or equivalent currency per foreign trip. To find the equivalent amount in Euros, check out the Euro rate today in Mumbai. The balance amount can be carried in the form of store value cards, traveller’s cheque or banker’s draft.
The foreign exchange is an important determiner of a country’s economic stability. The exchange rate is defined as "the rate at which one country's currency may be converted into another". The performance of a particular currency against another is closely watched. If you are curious, you can easily find Euro buying rate in Mumbai online. Forex is subject to a lot of fluctuations, sometimes even multiple times in a day. If you are planning to visit a foreign country, it is important to understand what drives the fluctuations of a particular currency. For fluctuations regarding the Euro, you can search for the Euro rate in Mumbai. Some of the most common factors that can affect the current Euro rate in Mumbai and the rest of the country include:
- Inflation: Inflation is a situation of a sustained increase in the general price levels in an economy. Inflation means an increase in the cost of living as the price of goods and services rise. The currency of a country will appreciate if its inflation rate is low.
- Interest Rates: A country with higher interest rates will see an appreciation in its currency. A high-interest rate means better rates for lenders which in turn attracts more foreign capital and thereby causes a rise in currency appreciation.
- Country’s Balance Sheet: The balance sheet of a country reflects its forex earnings through trade, exports, etc. vis-a-vis its forex expenditure through imports, debts, etc.
- Government Debt: A country can borrow money from other countries and international organizations to drive its economy. More the debt, more the depreciation in one’s currency.
- Terms of Trade: The terms of trade refers to the ratio of export prices and import prices. If forex revenue generated through exports is more than the forex expenditure on imports, there will be a higher demand for the country's currency and its currency will appreciate.
- Political Stability: The more a country is stable politically, the more will be the interest of foreign investors and thereby an increase in the value of its currency.
Things to remember when buying Euro in Mumbai
Depending on the valuation of a particular foreign currency, it can be determined as an expensive or inexpensive currency. Here are a few things to keep in mind before you buy Euro in Mumbai:
- Buy Forex well in advance: Currency valuations can fluctuate greatly. Ideally, you should watch the Euro buying rate in Mumbai for a period of time and then buy when it is at a comparatively lower rate. One can buy foreign exchange 180 days before their travel date from an authorized person or dealer.
- Buy in tranches: To average out the forex fluctuations for the Euro rate in Mumbai, if possible, you should buy them over a period.
- Compare rates: No matter where you buy Euros in Mumbai, do make sure to compare prices as there could be a huge difference in the Euro selling rates in Mumbai at different places.
Don’t Exchange at Airports: Forex at airports may seem like a convenient option but could prove to quite expensive, as airports charge anywhere between 5-10% when you buy or sell currency.