foreign exchange

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foreign exchange,

methods and instruments used to adjust the payment of debts between two nations that employ different currency systems. A nation's balance of paymentsbalance of payments,
balance between all payments out of a country within a given period and all payments into the country, an outgrowth of the mercantilist theory of balance of trade.
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 has an important effect on the exchange rate of its currency. Bills of exchange, drafts, checks, and telegraphic orders are the principal means of payment in international transactions. The rate of exchange is the price in local currency of one unit of foreign currency and is determined by the relative supply and demand of the currencies in the foreign exchange market. Buying or selling foreign currency in order to profit from sudden changes in the rate of exchange is known as arbitrage. The chief demand for foreign exchange within a country comes from importers of foreign goods, purchasers of foreign securities, government agencies purchasing goods and services abroad, and travelers. Exchange rates were traditionally fixed under the gold standard and later by international agreements, but in 1973 the major industrial nations of the West adopted a system of "floating" rates that allowed for fluctuation within a limited range. The currencies of Western nations are generally allowed to fluctuate freely, although central banks will intervene in the foreign exchange markets in an attempt to control excessive or undesirable appreciation or depreciation.

Bibliography

See S. W. Arndt et al., ed., Exchange Rates, Trade and the U.S. Economy (1985); N. Abuaf and S. Schoess, Foreign-Exchange Exposure Management (1988).

References in periodicals archive ?
The official also said that the Dubai Police has prepared a proposal to develop security procedures in gold and jewellery shops, money exchanges and other outlets that are at higher theft-risk, and will share this study with the owners.
The Qatari prince has planned to use a shut money exchange company as shield to save the dignity of his family and fake receipts are being obtained from this closed company.
Although money exchanges expect the dollar rate to rise, Khalil does not expect a decrease in the Egyptian pound rate in the upcoming days.
There are 114 money exchange firms in the country, according to the central bank's website.
Legitimate remittances from Pakistani expatriates residing abroad flow through the formal banking sector, licensed money exchange businesses, and hawalas.
The lack of a sufficient number of money exchange offices will open wide doors for the black market in malls and shopping centers," he said, warning that the foreign workers might tamper with the rates, as many of the people coming from outside may not have any idea about the prices.
Three unidentified masked gunmen in a vehicle carried out a robbery on the house of a money exchange office owner in al-Djami'ya neighborhood, al-Noamaniya district, (40 km) north of Kut," the source told Aswat al-Iraq news agency.
On February 18, the US Treasury said the company was at the center of an unofficial network of individuals, money exchange houses and other businesses operating throughout Afghanistan and in the United Arab Emirates.
handled about 40 percent more money exchange transactions year on year in July at its branch in the Yurakucho business district in Tokyo.
Cairo Amman Bank (CAB) adopted EastNetsAAE company solutions that connect the bank to money exchange companies and major corporations engaged in money transfer services across the SWIFT network.
An African national was arrested by Dubai Police on Monday for allegedly taking part in an armed robbery of a money exchange in Al Ghusais, report Gulf News .
resume about management mechanism in registration and depositing of money exchange and about electronic exchange system, operation of the two exchanging halls at Benghazi Tripoli cities and the electronically equipments been imported for its electronic mechanization according to modernistic standard specifications been applicable at the international stock markets.