The advantages of floating exchange rate system are: the fluctuation of market exchange rate can adjust the supply and demand of foreign exchange and eliminate the long-term imbalance of foreign exchange receipts and payments; At the same time, it can also prevent a large amount of investment from flowing internationally. The government does not need domestic expansion or contraction when adjusting the balance of payments and foreign relations, which improves the flexibility and freedom of domestic policies.

The defect of floating exchange rate is that the exchange rate fluctuates frequently and greatly, and importers and exporters do not estimate the cost, which is also risky, which is not conducive to the development of international trade. In addition, it may also lead to unexpected devaluation of national currencies, and intensify currency wars and exchange rate wars between countries. Exchange rate fluctuations also provide space for financial market speculation.

The advantage of fixed exchange rate system is to facilitate the pricing and settlement of international trade, which is conducive to the development of international economy and trade. It is conducive to the stability of the international monetary system and reduces speculation in the international market.

The defect of the fixed exchange rate system is that the exchange rate is easily overestimated or underestimated, thus affecting the trade balance. Under the fixed exchange rate, the adjustment policy of international payments often sacrifices domestic economic growth and lacks flexibility and freedom. When the fixed exchange rate is overvalued, it is also easy to cause market speculation.