In terms of balance of payments, it is simply the import and export of goods and services and the input and output of capital. In the balance of payments, if exports exceed imports and capital inflows, it means that the demand for the country's currency in the international market will increase, and the local currency will rise. On the other hand, if imports exceed exports and capital flows out, the demand for the country's currency in the international market will drop and the local currency will depreciate.

Coin parity is different from the actual exchange rate in the foreign exchange market. Coin parity is legal and generally does not change easily, while the real exchange rate fluctuates frequently due to the supply and demand relationship in the foreign exchange market. When there is a shortage of foreign exchange, the real exchange rate will exceed the coinage parity; When the foreign exchange supply exceeds the demand, the real exchange rate will be lower than the coinage parity. Just as the price of goods is constantly changing around the value, the real exchange rate is constantly fluctuating around the parity of coins. However, under the typical gold coin standard system, because gold can be imported and exported without restriction, no matter how strong the supply and demand of foreign exchange are, the fluctuation of the real exchange rate is limited, that is, it is limited between the export point and the import point of gold.