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Internship report On

Foreign Exchange Market of HSBC Bangladesh Ltd

An Internship Report Presented in Partial Fulfillment of the Requirements for the Degree Bachelor of Business Administration


Md. Lecturer, chool of Business .

It is a great pleasure for me to submit a. internship report on "Foreign #$change

Mar%et of & B' Bangladesh Ltd(. I am submitting this report as the part of my
internship (.) on HSBC Bangladesh. This report will help the organization to find out different fore asting te hni!ues of foreign e" hange mar#ets.

This is the first time I ha$e done a des ripti$e study in a omplete form and I ha$e tried my best to omplete the study in proper way. It is true that it ould ha$e been done in a better way if there would not be any limitations. I hope you will asses my report onsidering the limitations of the study. %our

#ind ad$i e will en ourage me to do further resear h in future.

)ours* most faithfull+,


First of all I 2ant to pa+ m+ gratitude to the Almight+ Allah for helping me in preparing this internship paper successfull+. super3isor, Md. econdl+, I 2ant to e$press m+ gratefulness to m+ internship

, for pro3iding me continuous support and guideline to prepare a

research paper. &is contri4ution to me can onl+ 4e ac%no2ledged 4ut ne3er 4e compensated.

I 2ould li%e to than% & B' glo4al mar%ets.

. and also a special than%s to

..! the colleagues of

Furthermore, I 2ant to con3e+ m+ heartiest than%s to m+ friends and families. /ithout their help I could not e3en thin% of preparing this report.

"a#le of Content Page

#$ecuti3e ummar+ 5.6 Introduction 7.6 tatement of the Pro4lem 9.6 Purpose of the stud+ ;.6 Research 1ime Line 8.6 Limitation of the tud+ :.6 Literature Re3ie2 <.6 Forecasting techniques in the foreign e$change mar%ets <.5 Fundamental Anal+sis <.5. a 0eneral teps to Fundamental #3aluation <.5. 4 #conomic Forecast <.7 1echnical Anal+sis <.7. a >nderl+ing assumptions of technical anal+sis <.7. 4 1he main considerations in 1echnical Anal+sis =.6 Research Methodolog+ =.5 Research Design =.5. a Primar+ ources =.5. 4 econdar+ ources =.7 Data 'ollection =.9 Data Anal+sis =.9.5 1echnical Anal+sis Basics 5 7 8 : : < = 56 56 55 57 59 59 59 5; 5; 5; 58 58 58 58

1a4le of 'ontent Page

=.9.5. a Rationale =.9.5. 4 1+pes of 'harts =.9.5. c 'andle 'hart =.9.5. d /h+ >se 'andle charts =.9.7 ome other Forecasting 1echniques ?.6 Discussion ?.5 Business utili@ation of technical anal+sis ?.5.5 Bangladesh interA4an% Foreign #$change Mar%et ?.5.5. a InterABan% 1ransaction in Foreign #$change ?.5.5. 4 Buarterl+ transactions of > DCBD1 and .ther F')CBD1 1ransaction ?.7 1he use of 1echnical anal+sis in Bangladesh ?.7.5 Importers point of 3ie2s ?.7.7 #$porters point of 3ie2s 56.6 ignificance of the tud+ 55.6 Ris%s In3ol3ed in foreign e$change 55.5. #$change Rate Ris% 55.7. Interest Rate Ris% 55.9. 'redit Ris% 55.;. 'ountr+ Ris% 57.6 Recommendation 79 7; 78 78 78 7: 7< 7= 7= 7? 96 58 5: 5< 5< 5= 75 75 75 75

59.6 'onclusion Reference Appendi$ 5 Appendi$ 7 Appendi$ 9 Appendi$ ; Appendi$ 8 Appendi$ : Appendi$ < Appendi$ =

95 99 9; 9; 98 98 9: 9< 9< 9=

List of Figures Page

5. A chart of the DP 866 and the +ield on the 56A+ear note o3er the last 96 +ears 7. 1+pes of charts used in forecasting 9. A price chart that displa+s the high, lo2, open, and close for a securit+ each da+ o3er a specified period of time ;. 'omparison of different forecasted rates 2ith the actual mar%et rate 8. )earl+ transaction from the +ear 7667A766< :. Month to Month InterABan% 1ransaction in Foreign #$change <. Buarterl+ transactions of > DCBD1 and .ther F')CBD1 1ransaction in the interA4an% mar%ets 79 5< 76 75 77 59 5:

Exec$ti%e S$mmar&

Ban%s pla+ a maEor role in maintaining confidence in the monetar+ s+stem of a countr+. 1his stud+ in3estigates a4out different forecasting techniques of foreign e$change mar%ets. 1his includes different forecasting techniques 2hich are follo2ed 4+ & B' and also some other forecasting methods 2hich I ha3e suggested to do in stead of the current techniques follo2ed 4+ the 4an%.

1he foreign e$change mar%et has pla+ed a 3ital role in the last decade or so in guiding the purchase and sale of goods, ser3ices and ra2 materials glo4all+. 1he mar%et directl+ affects countr+*s 4ond, equities, pri3ate propert+, manufacturing and all assets that are a3aila4le to foreign in3estors. 1he mar%et is a sta4ili@ing factor in the 2orld s+stem of monetar+ e$change and 2as created not 4+ design 4ut necessit+.

Foreign e$change rates also pla+ a maEor role in determining 2ho finances go3ernment deficits, 2hich 4u+s equities in companies and literall+ effects and influences the economic scenario of e3er+ nation to cope 2ith the foreign e$change ris% in an open mar%et econom+. 1he mar%et has its o2n momentum and therefore it is crucial to follo2 a uni3ersal time tested polic+ to tac%le the forces 4ehind the free mar%et s+stem 2ith minimal ris% in3ol3ement.

1his stud+ is 4ased on 4oth primar+ and secondar+ data, 2hich are collected from man+ sources.



&ong ,ong hanghai Ban%ing 'orporation F& B'G &eadquartered in London, & B' is one of the largest 4an%ing and financial ser3ices organi@ations in the 2orld. It 4egan operations in &ong ,ong more than 596 +ears ago. 1he & B' 0roupHs international net2or% comprises some <,666 offices in =6 countries and territories in #urope, the AsiaAPacific region, the Americas, the Middle #ast and Africa. /ith listings on the London, &ong ,ong, -e2 )or% and Paris stoc% e$changes, around 5?6,666 shareholders in some 566 countries and territories hold shares in & B'. 1hrough a glo4al net2or% lin%ed 4+ ad3anced technolog+, including a rapidl+ gro2ing eAcommerce capa4ilit+, & B' pro3ides a comprehensi3e range of financial ser3ices! personal, commercial, corporate, in3estment and pri3ate 4an%ingI trade ser3icesI cash managementI treasur+ and capital mar%ets ser3icesI insuranceI consumer and 4usiness financeI

HSBC group Vision & Values: Become the 2orld*s leading financial ser3ices compan+. Long term, ethical client ser3ice. &igh producti3it+ through team2or%. 'onfident and am4itious sense of e$cellence. 'apa4le of creati3it+ and strong mar%eting.

HSBCs Business Principal and value: 1he & B' 0roup is committed to fi3e Business Principles! .utstanding customer ser3iceI #ffecti3e and efficient operationsI trong capital liquidit+I 'onser3ati3e lending polic+I trict e$pense disciplineI

HSBC in Bangladesh 1he & B' Asia Pacific group represents & B' in Bangladesh. & B' opened its first 4ranch in Dha%a in 5<th Decem4er 5??: to pro3ide personal 4an%ing ser3ices, trade and corporate ser3ices, and custod+ ser3ices. 1he Ban% 2as a2arded I .?667 accreditation for its personal and 4usiness 4an%ing ser3ices, 2hich co3er trade ser3ices, securities and safe custod+, corporate 4an%ing, &e$agon and all personal 4an%ing. 1his I .?667 designation is the first of its %ind for a 4an% in Bangladesh. 1he &ong ,ong and hanghai Ban%ing 'orporation Bangladesh Ltd. primaril+

limited its operations to help garments industr+ and to commercial 4an%ing. Latter, it is e$tended to pharmaceuticals, Eute and consumer products. .ther ser3ices include cash management, treasur+, securities, and custodial ser3ice.

& B' in Bangladesh also speciali@es in selfAser3ice 4an%ing through pro3iding 7;Ahour A1M ser3ices. In total the 4ranch currentl+ has ? A1M*s F8 onAsite D ; offsiteG located at 3arious geographical areas of Dha%a D 'hittagong.

Operations of Global Markets:

& B'*s operations in 0lo4al Mar%ets consist of treasur+ and capital mar%ets ser3ices for supranational, central 4an%s, corporations, institutional and pri3ate in3estors, financial institutions and other mar%et participants. Products include! J Foreign e$changeI J 'urrenc+, interest rate, 4ond, credit, equit+ and other speciali@ed deri3ati3esI J 0o3ernment and nonAgo3ernment fi$ed income and mone+ mar%et instrumentsI J Precious metals and e$change traded futuresI J #quit+ ser3ices, including research, sales and trading for institutional, corporate and pri3ate clients and asset management ser3ices, including glo4al in3estment ad3isor+ and fund management ser3icesI and J Distri4ution of capital mar%ets instruments, including de4t, equit+ and structured products, utili@ing lin%s 2ith & B'*s glo4al net2or%s. 'orporate and In3estment Ban%ing

1he main purpose of treasur+ is to! Manage 4an%*s assets and lia4ilities. Promote and sell 4an%*s product. Manage the Ban%*s e$cessCshort foreign e$change products. Manage the 4an%*s e$cessCshort interest rate products.

Some Typical Treasury Products pot foreign e$change For2ard foreign e$change 2aps ! aG currenc+ 4G interest rate D cG structured .ptions ! aG plain 3anilla D 4G comple$ Deri3ati3es ! aG plain 3anilla D 4G structured ecurities ! aG 1ABills and 1ABonds 4G FR-s Repo D Re3erse Repo ! Repurchase C ellABu+ transactions Mone+ mar%et ! o3ernight and term deposits

7.6 tatement of the Pro4lem

-o2 a da+s, competition 4et2een 4an%s has reall+ increased in Bangladesh as there are quite a large num4ers of 4an%*s has esta4lished in past fe2 +ears. o it has reall+ important for & B' to hold up there current customers. o the management of & B' is facing a lot of competition and also thin%ing ho2 the+ can attract ne2 customers.

In this research I ha3e tried to sho2 different forecasting techniques of e$change rate, some forecasting pro4lems in the fore$ mar%ets due to technical pro4lem or 2rong prediction and also tried to recommend some solution to o3ercome these pro4lems.

9.6 Purpose of the stud+

1he purposes of this paper are to esta4lish rational 4ehind the acti3it+ and to enlighten a core area of operationA to forecast the e$change rate. /ithin the t2o maEor forecasting techniques, more emphasis is gi3en on the technical forecasting techniques 2hich is follo2ed 4+ & B' and I ha3e also tried to sho2n some alternati3e forecasting techniques and also suggested the 4est one I found 4ased on m+ calculations. A detailed discussion of these is presented in this paper.

1he purpose of the stud+ is to e$plore different forecasting techniques of foreign e$change mar%ets, technical anal+sis 4asics of foreign e$change mar%et, 4usiness utili@ation of technical anal+sis, use of technical anal+sis in & B', some ris%s in3ol3ed in foreign e$change mar%et and also the 2a+ to a3oid mista%es in foreign e$change mar%et

;.6 Research 1ime Line

766<A ept 766<A ept 766<A ept 766<A.ct 766<A-o3 766<ADec

/riting Research Proposal De3eloping Literature Re3ie2 'ollecting Data Data Anal+sis and Interpretation of the Findings Preparing Draft and Finali@ing the Research Paper u4mission of the Research Paper

8.6 Limitation of the tud+

1he maEor limitations of the technical anal+sis is, it ma+ or ma+ not produces the accurate proEections of the foreign currenc+ rates as a large amount of dependenc+ on the dealers perspecti3e. Also e$perience is the counta4le 3aria4les here, 2hich cannot 4e e$pressed, in an+ mathematical models. According to the technical forecasting techniques the mar%et has it o2n destin+ and the maEor part of the anal+sis 4ased on to determine the future. o maEor social or economical e3en political e3ents can change it a lot. o dealers must 4e reacti3e rather than proacti3e. 1ime frame for the research 2as 3er+ limited. LargeAscale research 2as not possi4le due to constraints and restrictions posed 4+ the organi@ation. 0etting rele3ant papers and documents 2ere strictl+ prohi4ited. 1he limitations that I alread+ faced are to una4le to collect local financial data, and also direct inter3ie2ing to managers doesn*t re3eal man+ aspects of & B' 2hich the+ den+ to ans2er or doesn*t 2ant to ans2er due to their o2n personal career securit+ at & B' .ne of the main 4arriers in 2riting this report 2as the confidentialit+ of data. 1hough I sa2 their internal procedure that is 4eing used in processing and e3aluating an+ documentar+ credit, 4ut I 2as told strictl+ not to disclose that e3en in m+ internship report.

:.6 Literature Re3ie2

Financial mar%ets could mean! 5. .rgani@ations that facilitate the trade in financial products. i.e. toc% e$changes facilitate the trade in stoc%s, 4onds and 2arrants. 7. 1he coming together of 4u+ers and sellers to trade financial products. i.e. stoc%s and shares are traded 4et2een 4u+ers and sellers in a num4er of 2a+s including! the use of stoc% e$changesI directl+ 4et2een 4u+ers and sellers etc. In academia, students of finance 2ill use 4oth meanings 4ut students of economics 2ill onl+ use the second meaning. Financial mar%ets can 4e domestic or the+ can 4e international. 1he foreign e$change Fcurrenc+ or fore$ or FKG mar%et e$ists 2here3er one currenc+ is traded for another. It is 4+ far the largest financial mar%et in the 2orld, and includes trading 4et2een large 4an%s, central 4an%s, currenc+ speculators, multinational corporations, go3ernments, and other financial mar%ets and institutions. 1he a3erage dail+ trade in the glo4al fore$ and related mar%ets currentl+ is o3er > L 9 trillion. Retail traders Findi3idualsG are a small fraction of this mar%et and ma+ onl+ participate indirectl+ through 4ro%ers or 4an%s, and are su4Eect to fore$ scams.

1he term F.R#K is deri3ed from the 2ords Foreign e$change and is the largest financial mar%et in the 2orld. >nli%e man+ mar%ets the FK mar%et is open 7; hours per da+ and has an estimated L5.7 1rillion in turno3er e3er+ da+. 1his tremendous turno3er is more than the com4ined turno3er of the main 2orlds* stoc% mar%ets on an+ gi3en da+. 1his trends to lead to a 3er+ liquid mar%et and thus a desira4le mar%et to trade.

>nli%e man+ other securities Fan+ financial instrument that can 4e tradedG the FK mar%et does not ha3e a fi$ed e$change. It is primaril+ traded through 4an%s, 4ro%ers, dealers, financial institutions and pri3ate indi3iduals.

1he Foreign #$change mar%et is a 2orld2ide net2or% 2hich connects the 3arious national e$change mar%ets 4+ telephone and tele$ etc, either directl+ or 3ia 4ro%ers, to transact foreign e$change 4usiness.

1he Foreign #$change, also referred to as the MFore$M or M pot FKM mar%et, is the largest financial mar%et in the 2orld. Mone+ is traded in the FK mar%et. Fore$ trading is 2here the currenc+ of one nation is traded for that of another. 1herefore, Fore$ trading is al2a+s traded in pairs. 1he most commonl+ traded currenc+ pairs are traded against the > Dollar F> DG. 1he+ are called Nthe MaEorsH. 1he maEor currenc+ pairs are the #uro Dollar F#>RC> DGI the British Pound F0BPC> DGI the Oapanese )en F> DCOP)GI and the 2iss Franc F> DC'&FG. 1he nota4le Ncommodit+* currenc+ pairs that trade are the 'anadian Dollar F> DC'ADG and the Australian Dollar A>DC> D. Because there is not a central e$change for the Fore$ mar%et, these

pairs and their crosses are traded o3er the telephone and online through a glo4al net2or% of 4an%s, multinational corporations, importers and e$porters, 4ro%ers and currenc+ traders. M1echnical anal+sis is the stud+ of mar%et action, primaril+ through the use of charts, for the purpose of forecasting future price trends.M In its purest form, technical anal+sis considers onl+ the actual price 4eha3ior of the mar%et or instrument, 4ased on the premise that price reflects all rele3ant factors 4efore an in3estor 4ecomes a2are of them through other channels. 1echnical anal+sis is 2idel+ used among traders and financial professionals, and some studies sa+ its use is more 2idespread than is MfundamentalM anal+sis in the foreign e$change mar%et. Academics such as #ugene Fama sa+ the e3idence for technical anal+sis is sparse and is refuted 4+ the efficient mar%et h+pothesis, +et some Federal Reser3e and academic studies include e3idence that supports technical anal+sis. MI1 finance professor Andre2 Lo argues that Mse3eral academic studies suggest thattechnical anal+sis ma+ 2ell 4e an effecti3e means for e$tracting useful information from mar%et prices.M Burton Mal%iel argues, M1echnical anal+sis is anathema to the academic 2orld.M &e further argues that under the 2ea% form of the efficient mar%et h+pothesis, M...+ou cannot predict future stoc% prices from past stoc% prices.

<.6 Forecasting techniques in the foreign e$change mar%ets!

'urrentl+ there are 2idel+ accepted t2o alternati3e techniques for forecasting, namel+ 5. Fundamental Anal+sis 7. 1echnical Anal+sis

7. !undamental "nalysis

A method of currenc+ 3aluation 2hich in3ol3es e$amining the countries financial figures li%e importCe$ports, 4alance of trade, reser3e on currenc+, political and economical ne2s etc. Fundamental anal+sis ta%es into consideration onl+ those 3aria4les that are directl+ related to the countr+ itself, rather than the o3erall state of the mar%et or technical anal+sis data. Fundamental anal+sis is the e$amination of the underl+ing forces that affect the 2ell 4eing of the econom+, industr+ groups, and companies. As 2ith most anal+sis, the goal is to deri3e a forecast and profit from future price mo3ements. At the compan+ le3el, fundamental anal+sis ma+ in3ol3e e$amination of financial data, management, 4usiness concept and competition. At the industr+ le3el, there might 4e an e$amination of suppl+ and demand forces for the products offered. For the national econom+, fundamental anal+sis might focus on economic data to assess the present and future gro2th of the econom+. 1o forecast future stoc% prices, fundamental anal+sis com4ines economic, industr+, and compan+ anal+sis to deri3e a stoc%Hs current fair 3alue and forecast future 3alue. If fair 3alue is not equal to the current stoc% price, fundamental anal+sts 4elie3e that the stoc% is either o3er or under 3alued and the mar%et price 2ill ultimatel+ gra3itate to2ards fair 3alue. Fundamentalists do not heed the ad3ice of the random 2al%ers and 4elie3e that mar%ets are 2ea%Aform efficient. B+ 4elie3ing that prices do not accuratel+ reflect all a3aila4le information, fundamental anal+sts loo% to capitali@e on percei3ed price discrepancies.

7. . a #eneral Steps to !undamental $valuation #3en though there is no one clearAcut method, a 4rea%do2n is presented 4elo2 in the order an in3estor might proceed. 1his method emplo+s a topAdo2n approach that starts 2ith the o3erall econom+ and then 2or%s do2n from industr+ groups to specific companies. As part of the anal+sis process, it is important to remem4er that all information is relati3e. Industr+ groups are compared

against other industr+ groups and companies against other companies. >suall+, companies are compared 2ith others in the same group. For e$ample, a telecom operator F'it+ cellG 2ould 4e compared to another telecom operator F0remeen PhoneG, not to an #lectronics compan+ FPhilipsG.

7. . % $conomic !orecast First and foremost in a topAdo2n approach 2ould 4e an o3erall e3aluation of the general econom+. 1he econom+ is li%e the tide and the 3arious industr+ groups and indi3idual companies are li%e 4oats. /hen the econom+ e$pands, most industr+ groups and companies 4enefit and gro2. /hen the econom+ declines, most sectors and companies usuall+ suffer. Man+ economists lin% economic e$pansion and contraction to the le3el of interest rates. Interest rates are seen as a leading indicator for the stoc% mar%et as 2ell.

Belo2 is a chart of the DP 866 and the +ield on the 56A+ear note o3er the last 96 +ears. Although not e$act, a correlation 4et2een stoc% prices and interest rates can 4e seen. .nce a scenario for the o3erall econom+ has 4een de3eloped, an in3estor can 4rea% do2n the econom+ into its 3arious industr+ groups.

&!igure: ' " chart o( the S&P )** and the yield on the *'year note over the last +* years,

7.- Technical "nalysis In contrast to the efficient mar%et h+pothesis or fundamental anal+sis, technical anal+sis in3ol3es the e$amination of past data li%e prices and 3olume of trading, 2hich leads to an estimation of future price trends and there of an in3estment decision. 1echnical anal+sis don*t require an+ anal+sis of the multitude of economic, industr+ and compan+ 3aria4les to arri3e at an estimate of future 3alue 4ecause the+ 4elie3e that past price mo3ements 2ill signal future price mo3ements.

7.-. a .nderlying assumptions o( technical analysis 5. 1he mar%et 3alue of an+ goods and ser3ice is determined solel+ 4+ the interaction of suppl+ and demand 7. uppl+ and demand is go3erned 4+ numerous factors, 4oth rational and irrational.

9. Disregarding minor fluctuations, the prices for indi3idual securities and the o3erall 3alue of the mar%et tend to mo3e in trends, 2hich persists for apprecia4le length of time ;. Pre3ailing trends change in reaction to shifts in suppl+ and demand relationships. 1hese shifts, no matter 2h+ the+ occur can 4e detected sooner or later in the action of the mar%et itself.








Price! 'hanges in price reflect in in3estor attitudes and demand and suppl+ of securities. 1ime! 1he degree of mo3ements in price is a function of time. 1he longer it ta%es for a re3ersal in trend for instance, the greater the price changes that 2ould follo2. Polume! 1he intensit+ of price changes is reflected in the 3olume transactions that accompan+ the changes. An increase is not strong enough. Breadth! tud+ of Breadth of mar%et indicators, the e$tent to 2hich the price changes ha3e ta%en place in the mar%et in accordance 2ith a certain o3erall limit.

=.6 Research Methodolog+!

/. 0esearch 1esign: ource of Data Both the primar+ as 2ell as the secondar+ form of data 2as used to prepare the report. 1he details of these sources are highlighted 4elo2! /. . a Primary Sources

MaEor sources of primar+ information 2ere discussions 2ith Mr. /ahidu@@aman and Md. Bahaudding aad, Dealers of glo4al mar%ets. /. .% Secondary Sources econdar+ information 2as collected from rele3ant documents and literature, & B' Internet 2e4 sites, AB' guide to foreign e$change, treasur+. .ther secondar+ sources 2ere 4oo%s on foreign e$change and treasur+ 4ac% office stuffs.

/.- 1ata Collection For data collection I ha3e inter3ie2ed dealers of glo4al mar%ets and also the treasurer of glo4al mar%et. I ha3e as%ed them man+ questions a4out m+ related topics. ome questions are! /hat are the operations of 0lo4al Mar%etsQ /hat are the main purposes of 1reasur+Q /hat are the 1reasur+ products & B' is using right no2Q /hat are the forecasting techniques of foreign e$change mar%etQ /hat are the Basic for technical anal+sisQ

/.+ 1ata "nalysis &ere are some Forecasting 1echniques follo2ed 4+ & B' in their Foreign #$change Mar%ets! =.9.5 1echnical Anal+sis Basics

/.+. . a 0ationale R#$amination of the past price mo3ements to forecast future mo3ements RPrice Discounts #3er+thing

RPrice Mo3ements are not 1otall+ Random R/hat is More Important than /h+ RDiscipline R di3orce +ourself from emotions R Polume for toc%, .pen Interest D 3olume for Futures

/.+. . % Types o( Charts Line, Bar, 'andle, Points D Figure #tc

&!igure: -' Types o( charts used in (orecasting,

/.+. . c Candle Chart


&I0& >pper hado2


Real Bod+ Lo2er hado2

B$ll Candle L./

Bear Candle

Candle Chart ' High %is$al im(act Mostl+ used for identif+ing short term trend re3ersals Must 4e used in conEunction 2ith other indicators

&!igure: +' " price chart that displays the high2 lo32 open2 and close (or a security each day over a speci(ied period o( time,

/.+. . d 4hy .se Candle charts 56a7e use o( your opportunities.8 FOapanese pro3er4G 1he candlestic% techniques 2e use toda+ originated in the st+le of technical charting used 4+ the Oapanese for o3er 566 +ears 4efore the /est de3eloped the 4ar and pointAandAfigure anal+sis s+stems. In the 5<66s a Oapanese man named &omma, a trader in the futures mar%et, disco3ered that, although there 2as a lin% 4et2een price and the suppl+ and demand of rice, the mar%ets 2ere strongl+ influenced 4+ the emotions of the traders. &e understood that 2hen emotions pla+ed into the equation a 3ast difference 4et2een the 3alue and the price of rice occurred. 1his difference 4et2een the 3alue and the price is as applica4le to stoc%s toda+ as it 2as to rice in Oapan centuries ago. 1he principles esta4lished 4+ &omma are the 4asis for the candlestic% chart anal+sis, 2hich is used to measure mar%et emotions to2ards a stoc%. 1his charting technique has 4ecome 3er+ popular among traders. .ne reason is that the charts reflect onl+ shortAterm outloo%sAAsometimes lasting less than eight to 56 trading sessions. A 4ig difference 4et2een the 4ar charts common in -orth America and the Oapanese candlestic% line is the relationship 4et2een opening and closing prices. /e place more emphasis on the progression of toda+Hs closing price from +esterda+Hs close. In Oapan, chartists are more interested in the relationship 4et2een the closing price and the opening price of the same trading da+.

/.+.- !ollo3ings are some other !orecasting Techni9ues in 3hich : have sho3n the calculations o( (orecasting (oreign e;change rates and also %ased on the result : made recommendation (or HSBC 3hich they can %e used instead o( their current method:

6oving "verage: In the mo3ing a3erage method, 2e use the most recent n data 3alues in the time series as the forecast for the ne$t period. Mathematicall+, the mo3ing a3erage calculation is made as follo2s! Mo3ing A3erageST Fmost recent n data 3aluesGCn 1he term "mo3ing( is used 4ecause e3er+ time a ne2 o4ser3ation 4ecomes a3aila4le for the time series, it replaces the oldest o4ser3ations, and a ne2 a3erage is computed. 1he a3erage changes, or mo3es, as ne2 o4ser3ations 4ecome a3aila4le. F ee Appendi$! ;A 'alculation of mo3ing a3erageG

$;ponential Smoothing "verage: #$ponential smoothing uses a 2eighted a3erage of past time 3alues as the forecast, it is special case of the 2eighted mo3ing a3erages method in 2hich 2e select onl+ one 2eightAthe 2eight for the most recent o4ser3ation. 1he 2eights for the other data 3alues are computed automaticall+ and 4ecome smaller as the o4ser3ations mo3e farther into the past. 1he 4asic e$ponential smoothing model follo2s! #$ponential moothing A3erage, F FtU5GSV)tUF5AVGFt /here, F FtU5G Sforecast of the time series for period tU5 )t Sactual 3alue of the time series in period t

FtSforecast of the time series for period t VSsmoothing constant F6WVW5G .r 2e can use the simplified form, FFtU5GS6.7)tU6.=Ft F ee Appendi$! 8A 'alculation of e$ponential smoothing a3erageG

Seasonal Variation: easonal 3ariation is the patterns of change in a time series 2ithin a +ear. 1hese patterns tend to repeat themsel3es each +ear. 1he third component of a time series is the seasonal component. Man+ sales, production, and other series fluctuate 2ith the seasons. 1he unit of time reported is either quarterl+ or monthl+.

Almost all 4usinesses tend to ha3e recurring seasonal patterns. Men*s and 4o+s* clothing, for e$ample, ha3e e$tremel+ high sales Eust prior to 'hristmas and relati3el+ lo2 sales Eust after 'hristmas and during summer.

In the follo2ing 0raph I 2ill sho2 +ou the comparison 4et2een different forecasting rate 2ith the actual mar%et rate F ee appendi$! <G!

'omparison .f different Forecasted rate 2ith the Actual Mar%et rate

<9 <7 <5 <6 )ate :? := :< :: :8 5 7 9 ; 8 : < = ? 56 55 57 59 5; 58 5: 5< 5= 5? Month Mo3ing a3erage forecast 'entered mo3ing a3erage #$ponential mothing Forcast FFtG Actual Mar%et Rate

&!igure: <'Comparison o( di((erent (orecasted rates 3ith the actual mar7et rate,

Among the three forecasting techniques, I thin% the mo3ing a3erage technique is the most appropriate, 4ecause from the graph +ou can see that among the three techniques the mo3ing a3erage techniques has the least spread than the other techniques compared to the actual forecasting techniques. And also from the mean calculationF eeAAppendi$! <G,2e can see that the spread 4et2een Mo3ing A3erage method and the Actual Mar%et rate is the least, 2hich is 6.55:5<7<<=,and it is the closest amongst the other methods. o, I can suggest & B' to use the mo3ing a3erage method if the+ 2ants to change their current Forecasting Method.

?.6 Discussion
= . Business utili>ation o( technical analysis =. . Bangladesh inter'%an7 !oreign $;change 6ar7et

=. . . a :nter'Ban7 Transaction in !oreign $;change 1he 3olume of interA4an% foreign e$change transaction maintained a do2n2ard trend till +ear 766: 4ut started to mo3e up2ard from the +ear 766:. In +ear 766:A766<, the interA4an% transactions in foreign e$change 2ere totaled > L59,<68,<?5.5;, 2hich has increased 4+ :,<6?,5;5.6:; compared 2ith the preceding +ear total > L :,??:,:86.6<: F ee appendi$ 5G. 1otal transactions in the interA4an% foreign e$change mar%et from the +ear 7667A766< 2ere gi3en into a graph as under! Total Transaction from year 2002-2007
16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 02-03 03-04 04-05 Year 05-06 06-07 Figure in US Dollar

&olum e in 'S()B(T

&!igure: )' ?early transaction (rom the year -**-'-**7,

Monthl+ position of interA4an% transactions 2as une3en o3er the period due to unpredicta4le demand and suppl+ position in the interA4an% mar%et.

MonthA2ise position of interA4an% transaction in foreign e$change for last t2el3e months is gi3en 4elo2 in a graphical form. It appears from the graph that the highest transaction too% place in OuneAOul+ 766<, o3er the last 57 months period Fsee appendi$ 7G.

Monthly Position of Inter-Ban Transactions

!mount "e#ui$alent in US Dollar%
+******* / .****** / -****** / ,****** / +****** / ******* .****** -****** ,****** +****** * Sep0 *1 t0 *2o$0 *(e 0 3 an0*4 5eb0 **4 6 ar0 *4 7pr0 *4 6 ay0 3 un0*4 3 ul0*4 7ug0 *4 *4 Sep0 *4

M onth

FFigure! :A Month to Month InterABan% 1ransaction in Foreign #$changeG

InterA4an% foreign e$change transactions ha3e 4een going on smoothl+ despite declining the trend of transaction 3olume from Oul+ 766<. 1he transactions equi3alent in million >. . Dollar in the interA4an% foreign e$change mar%et during Oul+A ept, 766< 2ere the follo2ingsA 5<?5;95=.5=, 5:67<9:=.;7, and 569?:866Fequi3alent in > DollarG, from 2hich 2e can see 3er+ easil+ that the transaction

3olume is declining month 4+ month.

=. . . % @uarterly transactions o( .S1AB1T and Bther !C?AB1T Transaction F')CBD1 Mar%et has e$perienced much unstead+ condition o3er the period in current +ear. 1he 3olume of other F')CBD1 transactions incredi4l+ increased during second quarter, the amount equal to 5;<=?5;.;<;, and after that during third and forth quarter it again declined and reach almost to its earlier position.

.n the other hand, > DCBD1 transactions decreased from 59<9=858.:9 to 56<6:=<8 during the second quarter, 4ut after that it again started mo3ing up2ard and reached to589=8=<9.67 during the fourth quarter Fsee appendi$ ;G. 1his is happened mainl+ due to suppl+ of >. . Dollar in the interA4an% fore$ mar%et and price hi%e of importa4le products li%e petroleum D petroleum products and other essential commodities in the international mar%et. A comparati3e position sho2ing quarterl+ mo3ement of > DCBD1 and other F')CBD1 transactions for the current +ear is gi3en in graph!

Quarterly mo vement o f uSD/ B DT and o ther F C Y/B DT T rans ac tio ns ( o lume! / .****** / -****** / ,****** / +****** / ******* .****** -****** ,****** +****** *
'S ()B(T Transa tion 5C%)B(T Transa tion

/ st 8uarter

+nd 8uarter

9rd 8uarter

,th 8uarter

Quarters of year "##$% "##&

&!igure: 7' @uarterly transactions o( .S1AB1T and Bther !C?AB1T Transaction in the inter' %an7 mar7ets, 1he 3olume of BD1 trades against > D decline during the second quarter due to the higher demand of import pa+ments as 2ell as the official rate declared against the > DCBD1 4+ the central 4an%. According to the official sources from 'entral Ban% > DCBD1 rates are :=.:5 ta%a Fas of -o3 6<G 2hereas the underl+ing rates of BD1 against F') reaches 1%:?.86. 'omparing a3erage 11 clean 4u+ing rates of the commercial 4an%s operated into this mar%et stands at :=.=6 on 58-o36: and selling rates at :?.=6 Frefers appendi$ :G. 1he difference 4et2een these 5..66 ta%a

4et2een the official and actual mar%ets rates insist the 3olume of F') deals against BD1 thus originating more cross currenc+ trading.

=.- The use o( Technical analysis in Bangladesh 1he use of forecasting techniques can pla+ maEor role in the increasing amount of transactions into the interA4an% foreign e$change mar%ets in the third currenc+. 1he reasons underl+ing these transactions are mainl+ the pot currenc+ speculations as 2ell as the o4ligations arise from the imports and go3ernments pa+ments. In order to minimi@e the ris% and to gain the opportunit+ o3er the glo4al currenc+ mar%ets the

introduction of the technical anal+sis help the speculators and gi3e the importer or e$porter the opportunit+ to hedge their currenc+ positions.

=.-. :mporters point o( vie3s If maEor trends can 4e identified in ad3ance the dealers can ad3ise the importer in ad3ance to co3er the ris% through for2ards or e3en 2ithin the da+ transactions. uppose an importer opens a LC' of 0BP5.66 million and the current mar%et rate against 0BPS > D 7.6:88 and > DS 1, :=.:686. if the documents ha3e to retire toda+ the importer ha3e to pa+ 1%5;5.<69: million toda+. But utili@ing the technical anal+sis, if the maEor trends can 4e identified, the importer can hedge their o4ligations as per the trend, i.e. if the trend is up2ard in 4oth 0BPC> D and > DCBD1, hedge it toda+ through spot of for2ard or if the trend in do2n2ard use the ma$imum period 4efore the pa+ments due date.

=.-.- $;porters point o( vie3s imilar to an importer, if an e$porter due to recei3e currenc+ li%e 0BP or > D against the e$port documents, can position accordingl+ to the maEor outloo%s of the underl+ing currenc+ heCshe 2ill recei3e. In the current scenario in > DCBD1 as the mar%et is in fa3or of > D, the e$porter should tr+ to lag hisCher e$port proceeds in order to get deprecated rates o3er 1a%a.

56.6 ignificance of the tud+

1he foreign e$change mar%et has pla+ed a 3ital role in the last decade or so in guiding the purchase and sale of goods, ser3ices and ra2 materials glo4all+. 1he mar%et directl+ affects countr+*s 4ond, equities, pri3ate propert+, manufacturing and all assets that are a3aila4le to foreign in3estors. 1he mar%et is a sta4ili@ing factor in the 2orld s+stem of monetar+ e$change and 2as created not 4+ design 4ut 4+ necessit+. Foreign e$change rates also pla+ a maEor role in determining 2ho finances go3ernment deficits, 2hich 4u+s equities in companies and literall+ effects and influences the economic scenario of e3er+ nation to cope 2ith the foreign e$change ris% in an open mar%et econom+. 1he mar%et has its o2n momentum and therefore it is crucial to follo2 a uni3ersal time tested polic+ to tac%le the forces 4ehind the free mar%et s+stem 2ith minimal ris% in3ol3ement. 1he research 2ill dra2 3arious forecasting techniques in the foreign e$change mar%et, 4asics of the technical anal+sis, 4usiness utili@ation of the technical anal+sis and also the utili@ation of the technical anal+sis in Bangladesh.

And finall+ the research has also descri4ed a4out some of the mista%es made in the fore$ mar%ets and also some techniques to a3oid the mista%es in the fore$ mar%ets 2hich the dealers appl+ 2hile doing their 2or%s.

55.6 Ris%s In3ol3ed in foreign e$change

.n the foreign e$change mar%et one discerns the follo2ing %inds of the ris%s! #$change rate ris%I Interest rate ris%I 'redit ris%I 'ountr+ ris%.

. . $;change 0ate 0is7 #$change rate ris% is a consequence of the continuous shift in the 2orld2ide mar%et suppl+ and demand 4alance on an outstanding foreign e$change position. A position 2ill 4e a su4Eect to all the price changes as long as it is outstanding. In order to cut losses short and ride profita4le positions that losses should 4e %ept 2ithin managea4le limits. 1he most popular steps are the position limit and the loss limit. 1he limits are a function of the polic+ of the 4an%s along 2ith the s%ills of the traders and their specific areas of e$pertise. 1here are t2o t+pes of position limits! da+light and o3ernight. 5. 1he da+light position limit esta4lishes the ma$imum amount of a certain currenc+ 2hich a trader is allo2ed to carr+ at an+ single time during. 1he limit should reflect 4oth the traderHs le3el of trading s%ills and the amount at 2hich a trader pea%s.

7. 1he o3ernight position limit 2hich should 4e smaller than da+light limits refers to an+ outstanding position %ept o3ernight 4+ traders. Reall+, the maEorit+ of foreign e$change traders do not hold o3ernight positions. 1he loss limit is a measure to a3oid unsustaina4le losses made 4+ tradersI 2hich is enforced 4+ the senior officers in the dealing center. 1he loss limits are selected on a dail+ and monthl+ 4asis 4+ top management. 1he position and loss limits can no2 4e implemented more con3enientl+ 2ith the help of computeri@ed s+stems 2hich ena4le the treasurer and the chief trader to ha3e continuous, instantaneous, and comprehensi3e access to accurate figures for all the positions and the profit and loss. 1his information ma+ also 4e deli3ered from all the 4ranches a4road into the headquarters terminals. Trading *C .-. :nterest 0ate 0is7 Interest rate ris% is pertinent to currenc+ s2aps, for2ard out rights, futures, and options. It refers to the profit and loss generated 4+ 4oth the fluctuations in the for2ard spreads and 4+ for2ard amount mismatches and maturit+ gaps among transactions in the foreign e$change 4oo%. An amount mismatch is the difference 4et2een the spot and the for2ard amounts. For an acti3e for2ard des% the complete elimination of maturit+ gaps is 3irtuall+ impossi4le. &o2e3er, this ma+ not 4e a serious pro4lem if the amounts in3ol3ed in these mismatches are small. .n a dail+ 4asis, traders 4alance the net pa+ments and receipts for each currenc+ through a special t+pe of s2ap, called tomorro2Cne$t or rollo3er.

1o minimi@e interest rate ris%, management sets limits on the total si@e of mismatches. 1he policies differ among 4an%s, 4ut a common approach is to separate the mismatches, 4ased on their maturit+ dates, into up to si$ months and past si$ months. All the transactions are entered in computeri@ed s+stems in order to calculate the positions for all the deli3er+ dates and the profit and loss. 'ontinuous anal+sis of the interest rate en3ironment is necessar+ to forecast an+ changes that ma+ impact on the outstanding gaps.

.+. Credit 0is7 'redit ris% is connected 2ith the possi4ilit+ that an outstanding currenc+ position ma+ not 4e repaid as agreed, due to a 3oluntar+ or in3oluntar+ action 4+ a counter part+. In these cases, trading occurs on regulated e$changes, 2here all trades are settled 4+ the clearing house. .n such e$changes, traders of all si@es can deal 2ithout an+ credit concern.

1he follo2ing forms of credit ris% are %no2n! 5. Replacement ris% 2hich occurs 2hen counter parties of the failed 4an% find their 4oo%s un4alanced to the e$tent of their e$posure to the insol3ent part+. 1o re4alance their 4oo%s, these 4an%s enter ne2 transactions. 7. ettlement ris% 2hich occurs 4ecause of different time @ones on different continents. uch a 2a+, currencies ma+ 4e credited at different times during the da+. Australian and -e2 Xealand dollars are credited first, then Oapanese +en, follo2ed 4+ the #uropean currencies and ending 2ith the >. . dollar. 1herefore, pa+ment ma+ 4e made to a part+ that 2ill declare insol3enc+ For 4e declared insol3entG immediatel+ after, 4ut prior to e$ecuting its o2n pa+ments.

1he credit ris% for instruments traded off regulated e$changes is to 4e minimi@ed through the customersH credit2orthiness. 'ommercial and in3estment 4an%s, trading companies, and 4an%sH customers must ha3e credit lines 2ith each other to 4e a4le to trade. #3en after the credit lines are e$tended, the counter parties* financial soundness should 4e continuousl+ monitored. Along 2ith the mar%et 3alue of their currenc+ portfolios, end users, in assessing the credit ris%, must consider also the potential portfolios e$posure. 1he latter ma+ 4e determined through pro4a4ilit+ anal+sis o3er the time to maturit+ of the outstanding position. For the same purposes netting is used. -etting is a process that ena4les institutions to settle onl+ their net positions 2ith one another not trade 4+ trade 4ut at the end of the da+, in a single transaction. If signs of pa+ment difficult+ of a 4an% are sho2n, a group of large 4an%s ma+ pro3ide shortAterm 4ac%ing from a common reser3e pool. uccessful 1rading 56= .<. Country 0is7 1he failure to recei3e an e$pected pa+ment due to go3ernment interference amounts to the insol3enc+ of an indi3idual 4an% or institution, a situation descri4ed under credit ris%. 'ountr+ ris% refers to the go3ernmentHs interference in the foreign e$change mar%ets and falls under the Eoint responsi4ilit+ of the treasurer and the credit department. .utside the maEor economies, controls on foreign e$change acti3ities are still present and acti3el+ implemented. For the traders it is important to %no2 or 4e a4le to anticipate an+ restricti3e changes concerning the free flo2 of currencies. If this is possi4le, though trading in the affected currenc+ 2ill dr+ up considera4l+, it is still a managea4le situation

57.6 Recommendation
Follo2ings are some methods of a3oiding foreign e$change ris%s! 1ont read the ne3s'analy>e the ne3s! Man+ times, seemingl+ straight for2ard ne2s releases from go3ernment agencies are reall+ pu4lic relation 3ehicles to ad3ance a particular point of 3ie2 or polic+. uch "ne2s,( in the fore$ mar%ets more than an+ other, is used as a tool to affect the in3estment ps+cholog+ of the cro2d. uch media

manipulation is not inherentl+ a negati3e. 0o3ernments and traders tr+ to do that all the time. 1he ne2 fore$ trader must reali@e that it is important to read the ne2s to assess the message 4ehind the drums.

1ont trade surges: A price surge is a signature of panic or surprise. In Reproduction or use of the te$t or pictorial content in an+ manner 2ithout 2ritten permission is prohi4ited. 'op+right 7667 4+ Futures Maga@ine 0roup, 786 . /ac%er Dr., uite 5586, 'hicago, IL :6:6: these e3ents, professional traders ta%e co3er and see 2hat happens. 1he retail trader also should let the mar%et digest such shoc%s.

1rading during an announcement or right 4efore, or amid some turmoil, minimi@es the odds of predicting the pro4a4le direction. 1echnical indicators during surge periods 2ill 4e distorted. )ou should 2ait for a confirmation of the ne2 direction and remem4er that price action 2ill tend to re3ert to preAsurge ranges pro3iding nothing fundamental has occurred.

Simple is %etter: 1he desire to achie3e great gains in fore$ trading can dri3e us to %eep adding indicators in a ne3erAending quest for the impossi4le dream.

imilarl+, trading 2ith a do@en indicators is not necessar+. Man+ indicators Eust add redundant information. Indicators should 4e used that gi3e clues to!5G trend direction, 7G resistance, 9G support and ;G 4u+ing and selling pres sure.

59.6 'onclusion
1echnical anal+sts consider the mar%et to 4e =6Y ps+chological and 76Y logical. Fundamental anal+sts consider the mar%et to 4e 76Y ps+chological and =6Y logical. It ma+ 4e open for de4ate, 4ut there is no questioning on the current price. After all, it is a3aila4le for all to see and no4od+ dou4ts its legitimac+. 1he price set 4+ the mar%et reflects the sum %no2ledge of all participants, and 2e are not dealing 2ith light2eights here. 1hese participants ha3e considered FdiscountedG e3er+thing under the sun and settled on a price to 4u+ or sell. 1hese are the forces of suppl+ and demand at 2or%. B+ e$amining price action to determine 2hich force is pre3ailing, technical anal+sis focuses directl+ on the 4ottom line! /hat is the priceQ /here has it 4eenQ /here is it goingQ

#3en though there are some uni3ersal principles and rules that can 4e applied, it must 4e remem4ered that technical anal+sis is more a practitioner*s things form than a science. As o3er time form, it is su4Eect to interpretation. &o2e3er, it is also fle$i4le in approach and each trader should use onl+ that 2hich suits hisCher st+le. De3eloping a st+le ta%es time, effort and dedication, 4ut the re2ards can 4e significant.

1oda+Hs mar%ets are incredi4l+ 3olatile. Plus, thousands competing against & B' 2ho are constantl+ loo%ing for an MedgeM. 1he mar%et ris% is 3er+ real, and can 4e daunting if & B' is not prepared. 1hatHs 2h+ need a trading strateg+ that 2ill help to reduce ris% and ensure re2ard.

Bangladesh Ban%, !oreign $;change #uidelines2 Bangladesh Ban%, Dha%a Bangladesh Ban%, Circular Do. 7 2

http!CC222.4angladesh4an%.orgCpressrlCcircularsC4rpdCoct6<694rpd5<.html 'ore Ris% Management A http!CC222.4angladeshA4an%.orgCpressrlCcoreris%sCferis%s.pdf #conomic De3elopmentA Author Michael P 1odaro and tephen ' mith Bangladesh Foreign #$change Dealers Association FBafedaG , Buarterl+ and Dail+ Fore$ Mar%et Re3ie2s In3estment Anal+sis and Portfolio Management A Fran% , Reill+ and ,eith ' Bro2n 1echnical Anal+sis in the Foreign #$change Mar%et! A La+manHs 0uide 'apital in3estment and financial decisionsA &aim le3+ and Marshall arnat http!

222.2i%ipedia.comAdefinitionAfinancial mar%ets
222.2i%ipedia.comAforeigne$change mar%et definition of fore$ mar%etAfore$ trading s+stem, mar%et, trade, foreign currenc+ and e$change trading


AB' guide to foreign e$change, & B', 0lo4al mar%ets introduction to fore$ 2i%ipediaAdeinitionAtechnical anal+sis tatistics for Business and #conomicsA Anderson, 2eene+, /illiamsA i$th #dition. tatistical 1echniques in Business D #conomicsA Lind, Marchel, MasonA #le3enth

Appendi$5! InterABan% 1ransaction in Foreign #$change on )earl+ Basis! 'alendar )ear 67A69 69A6; 6;A68 68A6: 6:A6< 1otal transactions F pot and For2ardAequi3alent in > DollarG 55,8<;,8<?.;; 56,<8;,:=8.?7 =,8?6,<9=.5<8 :,??:,:86.6<: 59,<68,<?5.5;

Appendi$ 7! Month to Month InterABan% 1ransaction in Foreign #$change! AmountF#qui3alent in > DollarG 59,:<9,786 ?,=:<777.777 =,:65,866 59,==8,=99.99 57,<96,87:.97 59,57=,?;<.9< 5;,=5;,=:=.;7 59,:7=,8<5.;9 5;,:79,=6?.87 5<,?68,79=.5 5<,?5;,95=.5= 5:,67<,9:=.;7 56,9?:,866

Month epA6: .ctA6: -o3A6: DecA6: OanA6< Fe4A6< MarA6< AprA6< Ma+A6< OunA6< OulA6< AugA6< epA6<

Appendi$9! Buarterl+ transactions of > DCBD1 and .ther F')CBD1 1ransaction in the interA 4an% mar%ets! Buarters of +ear Oul+766:A > DCBD1 Oun766< 1ransaction 5st Buarter 59<9=858.:9 7nd Buarter 56<6:=<8 9rd Buarter 5988=55;.6; ;th Buarter 589=8=<9.67

F')CBD1 1ransaction <;:,:;6.:78 5,;<=,?5;.;<; :<<,75:.;9== :<8,79=.6?87

Appendi$ ;! ummar+ of 79 months Mo3ing A3erage 'alculations! ummar+ of the 57 months mo3ing a3erage calculation Month Oanuar+A6: Fe4ruar+A6: MarchA6: AprilA6: Ma+A6: OuneA6: Oul+A6: AugustA6: eptem4erA6: .cto4erA6: -o3em4erA6: Decem4erA6: Oanuar+A6< Fe4ruar+A6< MarchA6< AprilA6< Ma+A6< OuneA6< Oul+A6< AugustA6< eptem4erA6< .cto4erA6< Dail+ mar%et Rate :=.:8;?7 <6.79=;: <7.59;?< <6.:96:: :?.=?<99 <6.7?8: <6.9<9?= <6.5=<99 :=.99:9? :<.8=;;< <5.<:;<9 <6.55?57 <6.7::9< :?.;7<: :?.75=;? :?.7=7<< :?.988< :?.7;8:= :=.?6:5 :?.66=:? :?.99?<8 :?.;79 Mo3ing forecast a3erage Forecast error quared error forecast

<6.9;7<=999 <5.6659:999 <6.==<:8999 <6.7<;89 <6.5==?< <6.7=8:9::< :?.:978:::< :=.<67<9 :?.77=89 :?.=77<<999 <6.<5:<; :?.?9<:?::< :?.:9<;=::< :?.96?:7 :?.7=8:8999 :?.7?;<5::< :?.5:?5: :?.689;? :?.6=;=;::<

6.7=<=<:::< A5.56;699999 A6.8?7689999 6.6??;8 A6.665:; A5.?;?7;:::< A7.6;=6?:::< 9.6:7 6.=?68? 6.;;98?:::< A5.7=?5; A6.<5?76:::< A6.98;<5:::< 6.6;:6= A6.69??<9999 A6.9==:5:::< A6.5:6;< 6.7=:7: 6.99=589999

6.6=7=<7?<8 5.75===?:65 6.98687<58 6.66?=?6969 7.:=?:#A6: 9.<??8:78:= ;.5?;:???8: ?.9<8=;; 6.<?95868;= 6.5?:<<=669 5.::5==5?; 6.85<78=77? 6.578=79?5; 6.6675799:: 6.6658?<=:< 6.585677?5; 6.678<86:75 6.6=5?;;<== 6.55;9;<:<<






8. ummar+ of the 58 months e$ponential smoothing a3erage calculation!

ummar+ of the 58 months e$ponential smoothing a3erage calculation Forecast Month Rate F)tG #$ponential moothing Forecast FFtG #rror :=.:8;? OanA6: Fe4A6: MarA6: AprA6: Ma+A6: OunA6: OulA6: AugA6: epA6: .ctA6: -o3A6: DecA6: OanA6< 7 <6.79=; : <7.59;? < <6.:96: : :?.=?<9 9 <6.7?8: <6.9<9? = <6.5=<9 9 :=.99:9 ? :<.8=;; < <5.<:;< 9 <6.55?5 7 <6.7::9 :=.:8;?7 :=.?<5:7= :?.:6;7?:; :?.=6?: :?.=7<5= :?.?76? <6.6558 <6.6;:< :?.<6;< :?.7=6< :?.<<<8 :?.=;8= 5.8=98; 9.5:99;7 5.67:9:9: 6.6=<<9 6.;:=;7 6.;896= 6.5<8=9 A5.<5695 A7.57679 7.;=;69 6.9;5:7 6.;768<

Fe4A6< MarA6< AprA6< Ma+A6< OunA6<

< :?.;7<: :?.75=; ? :?.7=7< < :?.988< :?.7;8: =

:?.?7??; :?.=7?8 :?.<6<7?= :?.:779?7; :?.8:?689?7

A6.8679; A6.:5565 A6.;7;87= A6.7:::?7; A6.9799<9?7

:. ummar+ of the 57 months easonal irregular 3alues! ummar+ of the 57 months easonal irregular 3alues Four quarter Four quarter )ear Buarter Rate total mo3ing a3erage <6.9;7< 766: 5 = <6.7<;8 7 9 :?.:978 7=6.6<7:89 9 < 9 <6.65=5:999 :?.=77< 7<?.9:<98: ; < < :?.=;5=9?5< :?.:9<; 7<=.9=<8;9 766< 5 ? 9 :?.8?:==8=9 :?.7?;< 7<<.=9?=79 7 7 9 :?.;8??88=9 :?.6=;= 9 8 'entered mo3ing a3erage easonalA Irregular Palue

:?.?966659 :?.<5?9:78 :?.87=;76=

5.6657:6<5? 5.665<8:<5 5.666?=;<68

<. 'omparison of Different forecasted rates 2ith the Actual Mar%et rate! 'omparison of Different forecasted rates 2ith the Actual Mar%et rate Mo3ing a3erage 'entered mo3ing #$ponential moothing Actual Mar%et forecast a3erage Forecast FFtG Rate :=.:8;?7 :=.:8;?7 <6.79=;: :=.?<5:7= <7.59;?< <6.9;7<=999 :?.:6;7?:; <6.:96::

Month OanA6: Fe4A6: MarA6: AprA6:

Ma+A6: OunA6: OulA6: AugA6: epA6: .ctA6: -o3A6: DecA6: OanA6< Fe4A6< MarA6< AprA6< Ma+A6< OunA6< MeanA

<5.6659:999 <6.==<:8999 <6.7<;89 <6.5==?< <6.7=8:9::< :?.:978:::< :=.<67<9 :?.77=89 :?.=77<<999 <6.<5:<; :?.?9<:?::< :?.:9<;=::< :?.96?:7 :?.7=8:8999 :?.?869588:

:?.?9666578 :?.?9666578 :?.?9666578 :?.<5?9:78 :?.<5?9:78 :?.<5?9:78 :?.87=;76=9 :?.87=;76=9 :?.87=;76=9


:?.=6?: :?.=7<5= :?.?76? <6.6558 <6.6;:< :?.<6;< :?.7=6< :?.<<<8 :?.=;8= :?.?7??; :?.=7?8 :?.<6<7?= :?.:779?7; :?.8:?689?7 :?.:89<;5:?

:?.=?<99 <6.7?8: <6.9<9?= <6.5=<99 :=.99:9? :<.8=;;< <5.<:;<9 <6.55?57 <6.7::9< :?.;7<: :?.75=;? :?.7=7<< :?.988< :?.7;8:= :?.=9;5;7<=

=. #$change rates of 'ommercial Ban%s to pu4lic for >s Dollar >. . Dollar pot Bu+ing pot elling ..D. ight ..D. 1.1. D B.'. #$p. Bills 1ransfer ..D. :=.6666 :<.<866 :=.?766 :=.?<66 :=.;<68 :=.9?66 :?.:966 :?.:866 :=.?866 :=.8997 :?.?;66 :?.??66 :=.6866 :<.=966 :=.?866 :?.6666 :=.6666 :<.<;66 :=.?766 :=.?<66 :=.;666 :=.9666 :?.8<66 :?.:666 :=.?6:? :=.;:<; :?.?666 :?.?866 :=.<7:; :=.<596 :?.<666 :?.<;66 :=.=<66 :=.::8: :?.?766 :?.?866

L. -o. -ame of Ban% 5 7 9 ; 8 : < = ?

1.1. 'lean :=.676 Agrani Ban% 6 :=.886 AlAArafah Islami Ban% Limited 6 :?.686 Ara4 Bangladesh Ban% Limited 6 :=.6<6 Bangladesh ,rishi Ban% 6 :=.676 Bangladesh hilpa Ban% 6 :=.886 BA I' Ban% Limited 6 :=.?86 Ban% Asia Limited 6 :=.<86 BRA' Ban% Limited 6 'iti4an%, -.A. :=.?66

56 55 57 59 5; 58 5: 5< 5= 5? 76 75 77 79 7; 78 7: 7< 7= 7? 96 95

6 'ommercial Ban% of 'e+lon :=.?66 Ltd. 6 :=.=?6 Dha%a Ban% Limited 6 :=.<76 DutchABangla Ban% Limited 6 :=.=86 #astern Ban% Limited 6 :=.886 #KIM Ban% Limited 6 :=.686 First ecurit+ Ban% Limited 6 :=.966 &a4i4 Ban% Limited 6 :=.==9 & B' Limited < :=.:?; IFI' Ban% Limited 8 Islami Ban% Bangladesh :=.866 Limited 6 :=.676 Oanata Ban% 6 :=.:66 Oamuna Ban% Limited 6 :=.<66 Mercantile Ban% Limited 6 :=.<66 Mutual 1rust Ban% Limited 6 :=.866 -ational Ban% Limited 6 :=.?66 -'' Ban% Limited 6 :=.:9; .-# Ban% Limited 6 :=.?66 Prime Ban% Limited 6 :=.;86 Pu4ali Ban% Limited 6 :=.786 Rupali Ban% Limited 6 :=.=86 hahEalal Islami Ban% Limited 6 ocial In3estment Ban% :=.?66

:=.=<97 :=.<:;5 :?.?586 :?.?;86 :=.<9:? :=.;:=5 :?.=766 :?.==66 :=.:7:8 :=.6<=: :?.<666 :?.<866 :=.<;7? :=.9?56 :?.=<66 :?.?666 :=.;866 :=.989? :?.;<66 :?.8666 :<.=:86 :<.8586 :?.7666 :?.7866 :=.;:66 :=.:766 :?.;<66 :?.8666 :=.=<?8 :=.:<68 :?.?76: :?.?;;< :=.86<8 :=.5998 :?.;<<8 :?.86<8 :=.;866 :=.7866 :?.;866 :?.8666 :=.6666 :<.<;66 :=.?766 :=.?<66 :=.;568 :=.5<97 :?.:<86 :?.<666 :=.8666 :=.78?7 :?.:866 :?.<666 :=.;679 :=.5<?6 :?.:<66 :?.<666 :=.;566 :=.5:66 :?.;866 :?.8666 :=.=666 :=.<666 :?.=866 :?.?666 :=.:677 :=.75;< :?.8866 :?.:666 :=.<57; :=.;?=5 :?.=866 :?.?666 :=.9866 :=.9666 :?.;866 :?.8666 :=.7666 :=.6666 :?.7966 :?.7866 :=.::7: :=.76<; :?.=:66 :?.?666 :=.<;65 :=.5?57 :?.<866 :?.=666

Limited 97 99 9; 98 9: 9< 9= 9? ;6 ;5 ;7

6 :=.676 onali Ban% :=.6666 6 :=.<86 outheast Ban% Limited :=.8866 6 :=.?66 tandard Ban% Limited :=.=665 6 :=.?66 tandard 'hartered Ban% :=.=<<6 6 :=.:86 tate Ban% of India :=.:5<8 6 :=.?66 1he 'it+ Ban% Limited :=.=6:7 6 :<.=66 1he .riental Ban% Limited :<.:??8 6 :=.686 1he Premier Ban% Limited :<.=?57 6 :=.?86 1he 1rust Ban% Limited :=.=866 6 >nited 'ommercial Ban% :=.=86 :=.<866 Limited 6 :=.;;6 >ttara Ban% Limited :=.9;69 6 A3erage :=.8?6= :=.;?=8

:<.<;66 :=.?766 :=.?<66 :=.5666 :?.:866 :?.<866 :=.<669 :?.=:66 :?.?666 :=.=955 :?.?766 :?.?866 :=.9<66 :?.:866 :?.<666 :=.;88= :?.<=66 :?.=866 :<.8:=7 :=.=866 :=.?666 :<.<885 :?.7666 :?.7866 :=.8866 :?.=666 :?.=866 :=.8?66 :?.=766 :?.=866 :=.5986 :?.;866 8?.8666 :=.7:95 :?.8:6< :?.9::;