exchange rate

Price of one country's money in relation to another's. Exchange rates may be fixed or flexible. An exchange rate is fixed when two countries agree to maintain a fixed rate through the use of monetary policy. Historically, the most famous fixed exchange-rate system was the gold standard; in the late 1850s, one ounce of gold was defined as being worth 20 U.S dollars and 4 pounds sterling, resulting in an exchange rate of 5 dollars per pound. An exchange rate is flexible, or “floating,” when two countries agree to let international market forces determine the rate through supply and demand. The rate will fluctuate with a country's exports and imports. Most world trade currently takes place with flexible exchange rates that fluctuate within relatively fixed limits. See also exchange control, foreign exchange.

Treasury issued its long-awaited report to Congress on international economic and exchange rate policies and concluded once again--despite overwhelming evidence to the contrary--that China was not "manipulating" its currency (the renminbi, or RMB for short).

Paulson's first challenge: can the new U.S. Treasury chief confront ... by Goldstein, Morris / The International Economy

First introduced by The Economist in 1986 and updated frequently since then, the Big Mac index is an informal way of measuring whether one currency is at the theoretically correct exchange rate with another currency.

Food for thought by Modern Casting

If you traveled in mid-August, for example, the exchange rate was $1.

Less bang for your buck: how to stretch the dollar overseas by Benet, Siobhan / Black Enterprise

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