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First Gold Network: How did the foreign exchange quotation come into being?
The decider of foreign exchange market quotation is determined by the risk control standard of foreign exchange liabilities and foreign exchange assets. The foreign exchange reserves of banks bring great market risks to banks. In order to prevent bank runs or other risks, ordinary banks will have their own unique risk control quota for each foreign currency. When the holding amount of a currency is higher or lower than the allowable range of risk control, banks must balance the foreign exchange market so that the holding amount of the currency is within the controllable risk range. In addition,

Banks will quote money according to the current market price, the market price they want and the quantity they need. This quotation may be similar to that of other banks, or it may be quite different.

When the exchange rate of a currency is very favorable to banks, banks will consider trading at this price. The bank's quotation to investors is usually acceptable to the bank and easy to settle immediately. In terms of quantity, this quotation is far less than the risk control limit of its own currency. Once the transaction volume is too large, the bank will tell investors another price.