What are Foreign Exchange Dealing Room Operations?


It is a profit centre for the bank and functions as a centralized service branch to meet the
needs of all other branches to buy/sell foreign currencies. It is manned by specially trained
personnel called ‘dealers or traders’, who undertake all foreign currency treasury
The primary function of the Dealing Room is to provide rates for various transactions being
put through at branch level with customers. Therefore every foreign currency related
transaction gets reported to the Dealing room. Rates provided by a bank to its customers
are called ‘Merchant Rates’. These rates can be subdivided as:

Card Rates

Ready Rates


Customers of the bank require derivatives for hedging their currency risks. Forward
Contracts and Swaps being OTC derivatives, they are provided by banks. Providing rates
for such transactions and covering the same is also the function of the dealers.

An important feature of a dealer’s job is to keep abreast of market developments,
international events and news items which would have an impact on exchange rates. This
helps them to take informed decisions regarding open positions to be maintained.
Dealers are required to comply with the Code of Conduct specified by RBI, and operational
guidelines provided by the Foreign Exchange Dealers Association of India (FEDAI).

Like it? Share with your friends!


MT UVA- University, Vocational and Affiliated Education for BMS


  1. Kindly let me know which areas are the focus of attention of the personnel working in dealing room and where does he come to a compromising position while dealing such operations?