The foreign exchange market Belgium is unique because of the fact that it is a two tier foreign exchange market. The foreign exchange market in Belgium is highly liquid as the international banks in Belgium are providing both bid (purchase) and ask (sell) offers at regular basis.
The volume of business in the foreign exchange market Belgium is higher than any other financial market of the country. Banque Nationale de Belgique or Nationale Bank van Belgi�(Belgian Central Bank) regulates the foreign currency exchange operations in the country. The features of foreign exchange market Belgium are at par with the global standard.
In this exchange, the buyers and sellers purchase and sell the currencies of different countries. The values of the currencies are determined by the respective national governments or central banks.
Following this global trend, the Belgian central bank performs the duty of determining and maintaining the exact value of the national currency of Belgium. As stated above, the foreign exchange market of Belgium is divided in two tiers.
These two tiers are the retail tier and the wholesale tier. These tiers are meant for different types of traders of the foreign exchange market. The retail tier is generally used by the agents who buy and sell small amount of currencies in this market. On the other hand, the wholesale tier is dominated by the currency brokerage firms and banks. These banks and the brokerage firms are involved in trading among each other and they are also involved in trading with huge corporations.
The foreign exchange market Belgium provides different financial instruments to the traders. Some of these instruments are the spot, forward transaction, futures, swap and options.
Spot is the two day delivery transaction, which denotes direct exchange within two currencies and involves maximum cash.
In forward transaction the buyer and the seller agree on a particular exchange rate for a particular currency and the transaction occurs on any future date, which is pre-determined.
The futures is a type of forward transaction and the trading is done on the futures exchanges. The contract period for the futures normally consists of 3 months.
Swap is the most common of the forward transactions but there is no particular exchange for this. Here, two parties are involved in the currency exchange for a limited time after which the transactions are reversed.
Options are derivatives and the owner of derivatives enjoys the right but not any kind of obligation for exchanging the currency at a pre-determined rate.