Foreign exchange market refers to the trading place where the supply and demand of foreign exchange is engaged in and adjusted internationally.
Its function is to manage monetary goods, that is, the currencies of different countries.
Due to the worldwide trade, investment, tourism and other economic exchanges, there is always a certain relationship between monetary balance and expenditure.
However, monetary systems differ from country to country.
If you want to pay abroad, you must first buy foreign currency with your own currency;
On the other hand, foreign currency payment vouchers received from abroad must also be converted into local currency before they can be circulated in China.
In this way, the problem of exchange between the local currency and the foreign currency arises. The exchange rate of these two currencies is called the exchange rate or exchange rate.
Central banks in Western countries and China often buy and sell foreign currencies to implement foreign exchange policies and influence exchange rates.
All commercial banks, specialized banks, importers and exporters, as well as supply and demand parties in the foreign exchange market, engage in various types of foreign exchange.
All these foreign exchange operations make up a country’s foreign exchange market.