Currency exchange rates also known as foreign exchange rates are rates between two currencies at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency. For example, an interbank exchange rate of 91 Japanese yen to the United States dollar means that ¥91 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥91. Foreign exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends. The spot exchange rate refers to the current currency exchange rates. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.
In retail currency rates market, a different buying rate and selling rate would be quoted by money dealers. Mostly, these traders are from the local currency market. The buying currency rates are the rates at which money dealers will buy foreign currency, and the selling foreign exchange rates is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin or profit in trading, or else the margin may be recovered in the form of a commission or in some other way. Different rates may also be quoted for cash usually notes only, a documentary form such as traveler's cheques or electronically such as a credit card purchase. The higher rate on documentary transactions is due to the additional time and cost of clearing the document; while the cash is available for resale immediately.
There are many types of situations in which people may want to buy currencies. For example, people intending to travel to another country may buy foreign currency in a bank in their home country, where they may buy foreign currency cash, traveler's cheques or a travel-card. From a local money changer they can only buy foreign cash. At the destination, the traveler can buy local currency at the airport, either from a dealer or through an ATM. They can also buy local currency at their hotel, or obtain it at an ATM, or at a bank branch.
In retail currency rates market, a different buying rate and selling rate would be quoted by money dealers. Mostly, these traders are from the local currency market. The buying currency rates are the rates at which money dealers will buy foreign currency, and the selling foreign exchange rates is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin or profit in trading, or else the margin may be recovered in the form of a commission or in some other way. Different rates may also be quoted for cash usually notes only, a documentary form such as traveler's cheques or electronically such as a credit card purchase. The higher rate on documentary transactions is due to the additional time and cost of clearing the document; while the cash is available for resale immediately.
There are many types of situations in which people may want to buy currencies. For example, people intending to travel to another country may buy foreign currency in a bank in their home country, where they may buy foreign currency cash, traveler's cheques or a travel-card. From a local money changer they can only buy foreign cash. At the destination, the traveler can buy local currency at the airport, either from a dealer or through an ATM. They can also buy local currency at their hotel, or obtain it at an ATM, or at a bank branch.
No comments:
Post a Comment