Concept of Exchange Rate

Exchange Rate

The exchange rate also called the foreign exchange rate between the two countries is the rate at which one currency is exchanged for another. So, it is the price of one currency relative to another.

The exchange rate specifies the number of units of a given currency that are needed to purchase one unit of another currency. For example, 120 Nepalese rupees are required to purchase or exchange for one US dollar.

The currencies of major countries are active in the international foreign exchange market or the international market but not all. Exchange rates are generally determined by the forces of demand and supply.

Name and Symbols of Some Country’s Currencies

Country/Region	Currency	Symbol
United States	Dollar	$
United Kingdom	Pound	£
Euro Zone	Euro	€
Germany	Deutsche Mark	DM
Japan	Yen	¥
Mexico	Peso	Mex$
Netherlands	Guilder	f or fl
Norway	Krona	Nkr
Sweden	Krona	Skr
Spain	Peseta	Pta
Switzerland	Franc	SF
Canada	Dollar	Can$
Australia	Dollar	AUD or A$
China	Yuan	¥
India	Indian Rupee	₹
Nepal	Rupee	Rs or Rp
South Korea	South Korean Won	₩