Local currency: Local currency refers to the legal tender of a country or region, and no other currency can circulate in this country except legal tender. For example, the only legal tender in Chinese mainland is RMB, so we also call RMB local currency at this time, but this concept is mostly used in the foreign exchange market. Everything except local currency is collectively called foreign currency.
Foreign currency: foreign currency is the abbreviation of "foreign currency", which refers to the currency of other countries or regions other than domestic currency. It is often used for foreign settlement business caused by trade, investment and other economic activities. Foreign currency refers to another currency used in the official currency area or a payment request made in another currency.
Exchange rate: Exchange rate, also called foreign exchange market or exchange rate, is the ratio of one currency to another, and the price of another currency is expressed in one currency. Because the names and values of currencies in different countries (regions) in the world are different, a currency should specify an exchange rate for the currencies of other countries (regions), that is, the exchange rate. In the short term, the exchange rate of a country (or region) is determined by the demand and supply of foreign currency in that country (or region). Foreigners buying their own goods, investing in their own country and investing in their own currency will all affect the demand for their own currency. Domestic residents want to buy foreign products, invest in foreign countries and speculate in foreign exchange, which affects their money supply. In the long run, the main factors affecting the exchange rate are: relative price level, tariffs and quotas, preference for domestic goods relative to foreign goods and productivity.