Exchange rate refers to the exchange price between two different currencies. If foreign exchange is regarded as a commodity, then the exchange rate is not just the price of buying another currency with one currency in the foreign exchange market. Currency exchange rate should be based on the relative prices between countries, that is, the exchange rate of two currencies should be equal to the ratio of the price levels of these two countries (calculated by a fixed basket of goods and services). Therefore, if the price rises or inflation occurs, the currency should depreciate and be compensated accordingly. Because the national conditions are different, the exchange rate is different.