Foreign exchange is the creditor's rights held by the monetary management authorities (central bank, monetary management institutions, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, treasury bonds and long-term and short-term government securities. , which can be used when the balance of payments is in deficit.
Foreign currency refers to the currency other than "bookkeeping base currency", which is the bookkeeping base currency relative to the domestic currency, and is specifically manifested as the currency other than "bookkeeping base currency" in accounting.
2. Different uses
The purpose of foreign exchange is mainly as a means of payment and a credit tool for international trade and settlement. It can be used to adjust the surplus and deficiency of international funds. It can be used as an important international reserve resource for a country. The purpose of foreign currency is mainly commodity payment and currency exchange.
3. Different forms
Generally speaking, only freely convertible foreign currency is foreign exchange, because the essence of foreign exchange is an international means of payment. If a currency is not freely convertible, it cannot become an international means of payment. Then at this time, foreign currency can only be called cash, and cash is concrete and real foreign banknotes and coins.
Because cash is in physical form, banks must transport it to foreign clearing banks, so that cash can become real foreign exchange funds for banks. Therefore, the bank will keep it, and the transportation cost will be borne by the customer. Therefore, when exchanging foreign currency, the exchange price of paper money and remittance is different. Spot foreign exchange is the foreign exchange on the books.
Its transfer out of the country, without physical transfer, can be directly remitted, just a transfer on the book. For banks, it's just on the account, so there's no need to keep it.
References:
Baidu encyclopedia-foreign exchange
Baidu encyclopedia-foreign currency