The International Currency Exchange Rate expresses the comparative value of the currency of a nation with respect to other nations. In the process of doing business internationally, the legal tender ( official medium of payment) of a nation when exchanged with that of another nation, is evaluated according to the exchange rate.
The International Currency Exchange Rate can be expressed in various ways in accordance with the national currencies of the two nations involved. The comparative value of the currency of a country when exchanged with that of another nation, during the conduction of international trade may precisely be said to be the exchange rate (between the two currencies involved).
The International Currency Exchange Rate may be expressed in the following ways :
Direct Quotation denotes the exchange rate in terms of the currency which is to be exchanged.
Indirect Quotation denotes the exchange rate in terms of the foreign currency into which a particular currency is being converted.
Cross Exchange Rate denotes the comparative worth of a currency in terms of another.
The International Currency Exchange Rate may be determined through either of the following procedures :
Fixed International Currency Exchange Rate procedure.
Floating International Currency Exchange Rate procedure.
