Settlement of foreign exchange refers to the behavior of enterprises or individuals buying and selling foreign exchange at the exchange rate. That is to say, the foreign exchange income obtained by individuals from abroad through trade or other legal channels, which has full ownership and can be freely disposed of, is converted into equivalent RMB with designated banks and currency exchange institutions at the exchange rate on the day of the transaction.

Generally speaking, professional import and export companies, according to the needs of import business, buy foreign currency from professional foreign exchange banks, remit it abroad in their own currency according to the foreign exchange quotation published by the state, or sell the foreign currency obtained from export to foreign exchange banks according to the quotation and exchange it in their own currency. This situation is called foreign trade settlement.

In China, foreign exchange quotations are published daily by the Bank of China, and foreign exchange management is also carried out by the Bank of China. There are buying price and selling price. The selling price is higher than the buying price, and the difference between them is the handling fee of bank exchange, or exchange income.

In addition, after the export goods are loaded, the import and export company should correctly prepare documents (such as packing list, invoice, bill of lading, export certificate of origin, export settlement) according to the provisions of the letter of credit, and submit them to the bank for negotiation and settlement within the validity period of the documents presented in the letter of credit.