1. International trade: When conducting cross-border trade, currency exchange is required, so as to convert the domestic currency into the currency of the other country and complete the payment.
2. Investment: Investors need to convert funds from one currency to another in order to invest in other countries.
3. Tourism: Tourists need to convert their own currency into the currency of the destination country in order to buy local goods and services.
4. Study: In order to pay tuition and living expenses, international students need to exchange their own currency into the currency of the destination country.
5. Cross-border payment: When an enterprise needs to make cross-border payment, it needs to exchange currency to complete the payment.
6. Foreign exchange reserves: the country needs foreign exchange reserves to cope with international trade and financial risks.
What is the difference between remittance and transfer?
1, business level is different. Exchange is a way to transfer payment. In other words, transfer involves exchange. Among various forms of transfer, currency exchange is a more flexible and commonly used method.
2. The object of transfer is different. Bank transfer refers to a monetary fund settlement method in which money is directly transferred from the payer's (or individual's) bank account to the payee's (or individual's) bank account through a bank, and the transfer subject is a non-bank subject.
Remittance, also known as "remittance settlement", is a settlement method in which the company (remitter) pays on behalf of the bank. Not any unit or individual transfers money, but bank transfers.