1. It is divided into freely convertible foreign exchange, limited freely convertible foreign exchange and bookkeeping foreign exchange according to the degree of restriction.
2. Freely convertible foreign exchange refers to the foreign exchange that is most used in international settlement, can be freely traded in the international financial market, can be used to pay off creditor's rights and debts in international finance, and can be freely converted into other countries' currencies. Such as US dollars, Hong Kong dollars and Canadian dollars.
3. Limited convertible foreign exchange refers to foreign exchange that cannot be freely converted into other currencies or paid to a third country without the approval of the issuing country. According to the regulations of the International Monetary Fund, all currencies with certain restrictions on international current payments and capital transfer are restricted freely convertible currencies. More than half of the national currencies in the world are limited convertible currencies, including RMB.
4. Bookkeeping foreign exchange, also known as clearing foreign exchange or bilateral foreign exchange, refers to foreign exchange deposited in bank accounts designated by both parties and cannot be converted into other currencies or paid to third countries.
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