1. As a means of payment for international settlement, foreign exchange is an indispensable tool for international economic exchanges. In order to promote international economic and trade development and political and cultural exchanges, debt relations have emerged between different countries. Because of the different monetary systems, one country's currency can't circulate in other countries, and the purchasing power between different countries can't be transferred except the internationally recognized means of settlement, gold.

1. With the development of foreign exchange business of banks, various credit instruments representing foreign exchange (such as bills of exchange) are widely used in the world, which makes it possible to transfer the purchasing power of money between different countries.

2. Promote the development of international trade and capital flow. Foreign exchange is the product of international economic exchanges. Without foreign exchange, the international turnover and utilization of funds cannot be accelerated, and international economic, trade and financial exchanges will be hindered. Paying off international creditor's rights and debts with foreign exchange can not only save the cost of transporting cash and avoid transportation risks, but also avoid capital backlog and accelerate capital turnover, thus promoting the development of international commodity exchange and capital flow.

3. Promote the regulation of international capital supply and demand. For example, in order to speed up the pace of construction, developing countries need to selectively use long-term and short-term credit funds in the international financial market and find a way out for the surplus funds of developed countries. Therefore, foreign exchange can play a role in regulating the surplus and shortage of funds between countries. Foreign exchange accumulation used to balance international payments, stabilize exchange rates and repay foreign debts.

First of all, the advantages of the fixed exchange rate system include:

1, which is conducive to the stable development of the economy. Under the fixed exchange rate system, the exchange rate is relatively stable, and the fluctuation range of the exchange rate is maintained spontaneously or artificially, which makes the price determination of import and export, the calculation and control of international trade costs, and the settlement of international creditor's rights and debts more stable, and reduces the risks brought by exchange rate fluctuations.

2. It is conducive to the accounting of costs and profits by economic entities such as international trade, international credit and international investment, so as to avoid the risk of exchange rate fluctuations and promote the development of the world economy.