Explain the retail and the wholesale parts of the foreign exchange market.

Explain the retail and the wholesale parts of the foreign exchange market. 

Ans. The foreign exchange market is loosely organized in two tiers: the retail tier and the wholesale tier. The retail tier is where the small agents buy and sell foreign exchange, orienting themselves to the reference rates of such agencies as Reuters which are adjusted round-the-clock to actual events in the market. The wholesale tier is an informal network of more than 1000 banks and currency brokerage firms that deal with each other and with large corporations. When the financial press talks about the foreign exchange market in general it refers to the wholesale tier.