Historically, "foreign exchange" is the abbreviation of "foreign exchange". Banks often do not need to pay in cash, but settle accounts by buying and selling currencies from different countries. This kind of international settlement business of banks is called international exchange. This is a dynamic concept, which refers to an exchange behavior, that is, with the help of various credit circulation tools, one country's currency is converted into another country's currency, and then the non-cash settlement of international creditor-debtor relations is carried out by remittance or collection. General static definition of foreign exchange: that is, foreign currency used for international settlement or payment voucher expressed in foreign currency.
The International Monetary Fund (IMF) explains foreign exchange as follows: "Foreign exchange is the creditor's rights held by monetary authorities (central bank, monetary institutions, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, treasury bonds and long short-term government bonds, which can be used when the balance of payments is in deficit."
Exchange rate refers to the price of one country's currency against another country's currency, that is, the buying and selling price when one country's currency is converted into another country's currency. In other words, the exchange rate is the exchange rate or parity between two different currencies, so it is also called "exchange rate" and "exchange rate".