1. What is the exchange rate?
Exchange rate (also known as foreign exchange rate, foreign exchange rate or foreign exchange market) The exchange rate between two currencies can also be regarded as the value of one country's currency against another. Exchange rate is also a financial means for a country to achieve its political goals. The exchange rate will change because of interest rates, inflation, national politics and national economies. The exchange rate is determined by the foreign exchange market. The foreign exchange market is open to different types of buyers and sellers to conduct extensive and continuous currency transactions (foreign exchange transactions are conducted 24 hours a day except weekends, that is, from 8: 15 GMT on Sunday to 22:00 GMT on Friday). Spot exchange rate refers to the current exchange rate, and forward exchange rate refers to the exchange rate quoted and traded on the same day, but paid on a specific date in the future).
Second, the exchange rate expression method
Exchange rates are usually expressed in two ways, namely, local currency exchange rate and foreign currency exchange rate. The exchange rate of local currency and foreign currency are two relative concepts, and their ups and downs have just opposite economic phenomena.
1. local currency exchange rate
It is expressed by the amount of foreign currency that can be converted by the unit's local currency, which is called the local currency exchange rate. It is called RMB exchange rate in China, that is, the RMB price expressed in foreign currency, and its formula is 100 @= X X foreign currency. When other factors remain unchanged, the RMB per unit amount can be exchanged for more foreign currencies, which means that the RMB exchange rate rises, the RMB appreciates relative to a foreign currency, the foreign currency depreciates, and the foreign exchange rate falls, which is beneficial to China's imports but not to exports; On the other hand, if the unit amount of RMB can be exchanged for a small amount of foreign currency, it means that the RMB exchange rate declines, the RMB depreciates relative to a foreign currency, the foreign currency appreciates and the exchange rate rises, which is beneficial to China's exports but not to imports.
2. Foreign exchange rate
It is expressed by the amount of domestic currency that can be converted from foreign currency in a unit quantity, which is called foreign exchange rate. China usually adopts 100 unit of foreign currency as the standard, which is converted into a certain amount of RMB, that is, the price of a foreign currency is expressed in RMB, and its formula is 100 unit of foreign currency = X. When 100 unit of foreign currency can be exchanged for more RMB, the foreign exchange rate rises, the foreign currency appreciates relative to RMB, and the RMB depreciates, that is, the foreign currency expressed in RMB.