- exchange rate
the ratio at which a unit of the currency of one country can be exchanged for that of another country. Also called rate of exchange.[1895-1900]
* * *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.
* * *▪ financethe price of a country's money in relation to another country's money. An exchange rate is “fixed” when countries use gold or another agreed-upon standard, and each currency is worth a specific measure of the metal or other standard. An exchange rate is “floating” when supply and demand or speculation sets exchange rates (conversion units). If a country imports large quantities of goods, the demand will push up the exchange rate for that country, making the imported goods more expensive to buyers in that country. As the goods become more expensive, demand drops, and that country's money becomes cheaper in relation to other countries' money. Then the country's goods become cheaper to buyers abroad, demand rises, and exports from the country increase.World trade now depends on a managed floating exchange system. Governments act to stabilize their countries' exchange rates by limiting imports, stimulating exports, or devaluing currencies.
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Look at other dictionaries:
exchange rate — ♦♦♦ exchange rates N COUNT The exchange rate of a country s unit of currency is the amount of another country s currency that you get in exchange for it … English dictionary
exchange rate — n. the rate at which the currency of one country or region can be exchanged for that of another country or region … English World dictionary
exchange rate — exchange′ rate n. ban bus the ratio at which a unit of the currency of one country can be exchanged for that of another country • Etymology: 1895–1900 … From formal English to slang
exchange rate — ► NOUN ▪ the value of one currency for the purpose of conversion to another … English terms dictionary
Exchange rate — Foreign exchange Exchange rates Currency band Exchange rate Exchange rate regime Exchange rate flexibility Dollarization Fixed exchange rate Floating exchange rate Linked exchange rate Managed float regime Markets Foreign exchange market Futures… … Wikipedia
Exchange rate — The price of one country s currency expressed in another country s currency. The New York Times Financial Glossary * * * exchange rate exˈchange rate noun [countable] FINANCE the price at which one currency can be bought with another: • If the… … Financial and business terms
exchange rate — The price of one country s currency expressed in another country s currency. Bloomberg Financial Dictionary * * * exchange rate exˈchange rate noun [countable] FINANCE the price at which one currency can be bought with another: • If the yen… … Financial and business terms
exchange rate — n. 1) to set an exchange rate 2) to apply an exchange rate * * * to apply an exchange rate to set an exchange rate … Combinatory dictionary
exchange rate — /ɪks tʃeɪndʒ reɪt/ noun 1. a rate at which one currency is exchanged for another. Also called rate of exchange 2. a figure that expresses how much a unit of one country’s currency is worth in terms of the currency of another country ▪▪▪ ‘…can… … Dictionary of banking and finance
exchange rate */ — UK / US noun [countable] Word forms exchange rate : singular exchange rate plural exchange rates the value of the money of one country when you change it into the money of another country … English dictionary