Foreign exchange refers to the creditor's rights held by the monetary authorities in the form of bank deposits, treasury bonds and long-term and short-term government securities. Can be used when the balance of payments is in deficit. Features include foreign currency, liquidity and repayment.

The exchange fund is more about the use of foreign currency. As the name implies, foreign exchange must have a certain relationship with assets that are not in domestic currency. For example, the currencies of other countries such as the US dollar and the British pound are all foreign exchange assets.