Can You Explain The Significance And Types Of Foreign Exchange?

Foreign Exchange is basically a currency that is foreign to your own country. However, the term Foreign exchange is used for exchange of money in one currency for another. This kind of exchange takes place in a foreign exchange market.

Foreign Exchange Market is considered as the largest and liquid financial markets in the world. It encompasses all the trading done by large banks, central banks, currency speculators, governments, companies etc.

The different types of foreign exchange rates are:

- Fixed Exchange rate
- Floating exchange rate
- Linked Exchange rates.