Buying foreign exchange means that you don't have foreign exchange in your hand, so you have to use RMB to buy foreign exchange first, and then use it to pay.
Cash refers to free transactions in the international financial market, also known as "free foreign exchange". Foreign exchange widely used in international settlement and payment and freely convertible into other countries' currencies.
In countries that issue these currencies, foreign exchange control and control are loose, and some even basically cancel foreign exchange control, while others have strict foreign exchange control, so their currencies cannot be freely converted into internationally used foreign currencies.
Buying foreign exchange means changing local currency cash into foreign currency cash, and the handling fee is slightly higher than buying foreign exchange, which can be reflected in the daily foreign exchange selling price (the price that the bank sells to customers) and the cash selling price issued by the Bank of China.
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Skills of buying foreign exchange
As the exchange rate fluctuates at any time, the bank's foreign exchange quotation changes every day. Therefore, it is very important to keep an eye on the market and choose the right time to exchange foreign exchange. In addition, there will be some exchange rate differences between different banks. It is suggested that when purchasing foreign exchange, we can compare different banks and choose the most economical exchange rate.
According to Article 8 of the Agreement of the International Monetary Fund, as a general obligation of member countries, a country's currency must meet three conditions before it can become a cash exchange:
1. There are no restrictions on the current account (trade and non-trade payments) and capital transfer in China's balance of payments.
2. Don't take discriminatory monetary measures or multi-currency exchange rates.
3. At the request of another member state, it is obliged to buy back the remaining domestic currency in the current account of the other party at any time.
A freely convertible currency is widely used in international exchange settlement, freely traded in the international financial market, and freely convertible into the currencies of other countries. In international trade, the import and export trade settled in these freely convertible currencies is called spot trade.
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