Foreign Exchange

Term 'Foreign Exchange' is generally used for the currency through which a country pays to the other country. In other words, foreign exchange is the money or means through which a country not only can purchase goods and services from other countries but also receives the same through sale of its goods and services to other countries. Moreover, it also discharges its debts with the same foreign currency.

Foreign exchange is the system through which the currency of one country is exchanged with the currency of other country. In other words, foreign refers to the system and arrangements through which international indebtedness is settled. It also refers to the methods through which the rate of exchange between the currencies of two countries are determined.