Dynamic meaning: the transaction process of converting one country's currency into another country's currency and remitting it to another country with the help of international credit instruments to pay off the creditor-debtor relationship formed by economic and trade exchanges between the two countries.
Static meaning: foreign exchange is a means of payment expressed in foreign currency for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as bank deposits, commercial bills, bank drafts, bank checks, foreign government treasury bills and their long-term and short-term securities.
The International Monetary Fund defines foreign exchange as: "Foreign exchange is the creditor's rights held by the monetary authorities in the form of bank deposits, treasury bonds, long-term and short-term government securities, etc. Can be used when there is a deficit in the balance of payments. "
What's the foreign exchange rate?
We are all familiar with domestic trade. If you go to the store to buy rice, you will naturally pay RMB. Of course, Midian is also happy to accept RMB. Trade can be conducted in RMB. Commodity exchange within a country is relatively simple. However, if you want to buy an American-made electronic computer, things are complicated. Maybe you paid RMB in the store, but through the role of financial institutions such as banks, you finally paid US dollars instead of RMB. Similarly, if Americans want to buy goods from China, they will eventually pay RMB. In this way, we introduced the concept of exchange rate from international trade: exchange rate is the ratio of one country's monetary unit to that of other countries.