Under the gold standard, the ratio of the gold content of two currencies, that is, the coinage parity, is the basis for determining the exchange rate of the two currencies. Generally speaking, once the legal gold content is determined, it will not be easily changed. Therefore, the parity of coins as the basis of exchange rate is relatively stable.
Under the gold standard, the exchange rate will also fluctuate, and the characteristics of fluctuation are as follows: (1) The factor affecting exchange rate fluctuation is the relationship between foreign exchange supply and demand. When the supply of a certain currency exceeds the demand, that is, when the export increases and the trade surplus accumulates, its exchange rate will rise and exceed the coinage parity; When the supply of a certain currency exceeds demand, that is, imports increase, exports decrease, and there is a large trade deficit, its exchange rate will fall below the coinage parity. (2) Under the gold standard system, the change of exchange rate is limited, and it is limited within the boundary between the upper and lower parts of coinage parity, which is the gold delivery point. Under the gold standard system, gold can be freely dissolved, freely minted and freely imported and exported, which makes it possible for gold to replace currency, foreign exchange bills and other means of payment for international debt settlement. Specifically, on the one hand, when the foreign exchange rate rises to or exceeds a certain limit, the cost (exchange rate) for domestic debtors to buy foreign exchange in local currency will exceed the cost (transportation fee, insurance fee, packaging fee, recasting fee, etc.) paid for direct export of gold. ), resulting in gold exports, and this exchange rate limit that causes gold exports is the "gold export point." The exchange rate at the location of the gold export point is equal to the coinage parity plus additional expenses such as transportation fees, insurance fees, packaging fees and recasting fees required for transporting gold between the two countries; On the other hand, when the foreign exchange rate falls and reaches or falls below a certain limit, the income of foreign exchange creditors in China from converting foreign exchange into local currency will be less than the income from buying gold abroad and then transporting it back to China, thus causing gold input. This exchange rate limit that causes gold input is the "gold input point". The exchange rate at the place where gold is imported is equal to the coinage parity minus the transportation fee, insurance fee, packaging fee and recasting fee for transporting gold between the two countries.