The concept of foreign exchange can be divided into static a
2023-06-19
The concept of foreign exchange can be divided into static and dynamic.
1. Static concept
The static concept of foreign exchange refers to the means of payment expressed in foreign currency that can be used for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as: bank deposits, commercial bills, bank drafts, bank checks, long-term and short-term government securities, etc.
2. Dynamic concept
The dynamic concept of foreign exchange refers to a specialized business activity in which one country's currency pair is exchanged for another country's currency to repay international creditor's rights and debt relations. It is the abbreviation of international exchange.
Here, it needs to be pointed out that the currency of some countries cannot be freely converted in the international market, so it can only be regarded as foreign currency instead of foreign exchange abroad.
Exchange rate, also known as exchange rate, refers to the price of one country's currency expressed in another country's currency, or the comparison between the two currencies. Usually expressed as the exchange rate between two currencies. For example: USD/CNY=1/7.2456, that is, the exchange rate between the US dollar and RMB is 1:7.2456. It can also be said that 1 US dollar needs to be purchased with 7.2456 RMB.