Foreign Exchange Rate-what is foreign exchange rate
Foreign Exchange Rate is a country's currency into another national currency conversion rate parity or price. It can be said, are expressed in domestic currency to foreign currency "price." Foreign Exchange Trading generally concentrated in commercial banks and other financial institutions. Of their foreign exchange trading is aimed at the pursuit of profit, is cheap buying expensive goods to sell, bid-ask spread earn their buying foreign exchange when the exchange rate based on buying rate, also known as the bid price; sell foreign exchange when the exchange rate based on called the selling exchange rate, also known as the selling price. In direct price law, the buying rate for banks to buy one unit of foreign currency to pay for the number of banks selling currency to sell a unit of foreign currency received by the number of the local currency. Intermediate exchange rate is the buying rate and selling rate of the central parity, that is buying rate selling rate 10 1 / 2 = intermediate exchange rate applicable to the sale of foreign exchange between banks, which means that they buy and sell foreign currency would not make a profit.
Foreign exchange rates - exchange rate system
1. The concept of exchange rate regime Exchange rate system, also known as exchange rate arrangements (Exchange Rate Arrangement): is widely used to determine their own national currency and other currencies, the exchange rate system. States or the international community for the determination, maintenance, adjustment and management of the exchange rate principles, methods, modalities and institutions, the provisions made by the system. Exchange rate regime on the national exchange-rate decision to have a significant impact. Review and understand the exchange rate system, you can give us the international financial market fluctuations in the exchange rate to gain a deeper understanding. In accordance with the size of the exchange rate volatility, exchange rate system can be divided into a fixed exchange rate regime and floating exchange rate system.
Fixed exchange rate system (fixed exchange rate system) refers to itself or the legal gold content-based currency exchange rate, the benchmark for determining the exchange rate as a relatively stable exchange rate system. In different monetary systems have different fixed exchange rate system.
a. floating exchange rate system (floating exchange rate system) refers to a State does not require local currency and foreign currency exchange rate fluctuations in the gold parity and the limits of the monetary authorities do not undertake any obligation to maintain the boundaries of exchange rate fluctuations, the exchange rate with the foreign exchange market to changes in supply and demand and free a floating exchange rate system from top to bottom. The system already existed in history, but the real epidemic is in 1972 dollars as the center after the collapse of the fixed exchange rate system.
2. The contents of the exchange rate regime a. the principles and basis for determining the rate. For example, based on the value of the currency itself, or the value of a statutory basis for such representatives.
b. to maintain and adjust the exchange rate approach. For example, to adopt an open approach to statutory revaluation or devaluation, or allowed to float or official to take a limited intervention approach.
c. management of the exchange rate of the laws, institutions and policies. For example, national foreign exchange control exchange rates and scope of the relevant provisions.
d. The establishment, maintenance and management of the exchange rate of the body, such as Foreign Exchange Authority, the Exchange Stabilization Fund Committee.
Foreign Exchange Rate ==>
Classification of Foreign Exchange Rate ==>
Foreign exchange rates - pricing approach ==>
