The exchange rate of foreign exchange settlement is lower than that of foreign exchange purchase, which means you need to pay more RMB when you buy foreign exchange, but you get less money when you convert foreign exchange back into RMB. In this case, from the perspective of foreign exchange, it is a loss.

For example, suppose the exchange rate for purchasing foreign exchange is 1 USD =6.5 yuan RMB, and the exchange rate for settling foreign exchange is 1 USD =6 yuan RMB. Then, if you buy 1 USD with 6.5 yuan RMB, and then you need to exchange this 1 USD back into RMB, you can only get 6 yuan RMB. So you will lose 0.5 yuan RMB.

However, this situation does not mean that you will definitely lose money when trading in foreign exchange. Because the exchange rate fluctuates, sometimes the exchange rate of foreign exchange purchase will be higher than the exchange rate of foreign exchange settlement, and then you can make a profit from it. Therefore, when conducting foreign exchange transactions, it is necessary to pay close attention to the change of exchange rate and seize the opportunity reasonably in order to achieve profitability.