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 ?
To gain more oversight of the informal money transfer sector, the State Bank of Pakistan (SBP) requires all money exchange companies to obtain licenses and meet minimum capital requirements.
The firm's general manager, Sasidharan K P, said, 'In the first quarter of 2011, Global Money Exchange registered a 25 per cent growth in remittances from Oman compared to last year.
Between 2007 and 2010, the New Ansari Money Exchange used the billions of dollars it transferred in and out of Afghanistan to conceal illicit narcotics proceeds," the Treasury said in a statement.
Business is thriving also at a money exchange shop set up in July inside the Umeda branch of Senshu Ikeda Bank, with robust demand from people traveling abroad on business.
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.
The raid came after five people were killed on Sunday in a daylight attack at a popular money exchange office, a reflection of the increasing crime in Iraq even as violence is on the decline.
The GSMA, the body that represents the worldwide mobile communications industry, announced the launch of the Mobile Money Exchange initiative at the Annual Mobile Money Summit in Barcelona.
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.
Because a money-changing contract is a question of changing coins, and, in the proposed instances, there is no other exchange except of coins, it follows that the aforesaid contracts of their nature are truly instances of money exchange but of different degrees.
ENGLAND Rugby Union captain Jonny Wilkinson yesterday kicked off a new TV ad campaign for money exchange firm Travelex.
Choudhri's office building, several men sit at desks in a one-stop office that offers insurance coverage, a money exchange, and a travel agency.