1. As a means of pricing and payment in international settlement, foreign exchange has shifted the international purchasing power, made the currency circulation between countries possible and facilitated international settlement. Various forms of international economic exchanges have formed the relationship between international creditor's rights and debts, and the liquidation of international creditor's rights and debts requires certain means of payment.
The appearance of foreign exchange has promoted the development of international trade. The use of foreign exchange for international settlement has the characteristics of safety, convenience, cost saving and time saving, thus accelerating the development process of international trade and expanding the scope of international trade.
3. Foreign exchange can adjust the international capital flow, adjust the imbalance between international capital supply and demand, and accelerate the process of world economic integration. The application of various foreign exchange bills in international trade has expanded the scope of international financing, and at the same time, with the continuous improvement of the openness of countries.
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Matters needing attention
In the period when gold was used as an international means of payment, the international reserves of various countries were mainly gold. With the non-monetization of gold, foreign exchange, as an international payment method, is widely used in international settlement, so foreign exchange has become a very important reserve asset for all countries.
If a country has a balance of payments deficit, it can make up for it with foreign exchange reserves; If a country has a large amount of foreign exchange reserves, it means that it has a strong international solvency.
The important role of foreign exchange in international payment determines that it is an important international reserve means; As an international reserve, foreign exchange doesn't have to be put in the vault like gold, and it becomes a temporary idle asset, which can't bring income. It widely exists in the form of safe and liquid bank deposits and securities, bringing benefits to the holding countries.