Foreign exchange cash is tangible foreign banknotes and coins. When customers want to transfer cash abroad, they can bring cash or remit money. However, when customers use "remittance", because cash is in kind, the bank must transport it abroad, and the transportation expenses will be borne by the customers, which is manifested as "selling cash to buy cash" (customers sell cash to buy cash).
In the foreign exchange quotations published by designated foreign exchange banks, the cash buying price is less than the cash buying price, while the cash selling price is equal. This shows that the country's foreign exchange management policy is to encourage the holding of cash and limit the holding of cash because cash is more convenient for foreign exchange management than cash.
According to Article 8 of the IMF Agreement, the general obligation of member countries, a country's currency must meet three conditions to become a cash exchange:
1. There are no restrictions on the current account (trade and non-trade payments) and capital transfer in China's balance of payments.
2. Don't take discriminatory monetary measures or multi-currency exchange rates.
3. At the request of another member state, it is obliged to buy back the remaining domestic currency in the current account of the other party at any time.
A freely convertible currency is widely used in international exchange settlement, freely traded in the international financial market, and freely convertible into the currencies of other countries. In international trade, the import and export trade settled in these freely convertible currencies is called spot trade.
Baidu Encyclopedia-Cash