Getting one currency in exchange for another or the change of one currency into another currency is called foreign exchange. The term foreign exchange may also make reference to the giant open markets in the world where currencies are exchanged and traded constantly 24/7. Theseopen marketsare more commonly known as Foreign Exchange Markets or Forex / FX. Foreign Exchange Markets are involved in selling and buying of multiple currencies at fixed on prices.
Since foreign exchange is another term for exchange of currency, it takes place when people belonging to one country purchase or sell currency while traveling to other places. Exchange rate of currency is regulated by foreign exchange traders. Since foreign exchange involves global trading of currencies, investors from around the world also buy currency of economically stable countries either to buy/ sell goods or services or to save it in banks to receive duly interest on it.
With the recent escalation in globalization, the rate of foreign exchange in global markets is getting more and more every day. People traveling around the world, getting their currencies exchanged at the airport in other words are involved in foreign exchange as well. Besides that, huge corporations, financial organizations and governments of different countries make and receive transactions worth billions of dollars on routine basis, promoting foreign exchange. Besides the acquisition of currency, the global transactions / dealings may cover import and export of goods between markets of different countries.
The largest foreign exchange and trading markets in the world are in Singapore, New York, Sydney, Frankfurt, Tokyo, Hong Kong and London. As for the participation in the foreign exchange market, more prominent are the substantial international banks like JP Morgan, Barclays, HSBC, UBS, Citi, Deutsche Bank etc, collectively called interbank market. Throughout the week, trading is kept ongoing by financial markets around the world. Basically international banks are in constant connection with smaller financial firms generally referred as dealers who are responsible for foreign exchange trading among international markets.
The daily exchange rate is usually fixed by National Bank of every country. This process is known as foreign exchange fixing. The fixed rates set by traders, banks and dealers give stability to the market and are seen as an indicator to trend in the international market. Sometimes the banks do not attain their goal due to which stability in the market is disturbed
Following are the factors affecting foreign exchange rates;
If economy of a country is stable then that countrys currency value is high. More international markets acquire that currency.
Lower inflation rate of a country tends to increase its currency exchange rate worldwide.
The unbalanced trade between countries increases foreign exchange rates. It means if a country is making less money on its exports and spending more on its imports then it devalues the currency hence affecting foreign exchange rates.
If a country has more public debts then it engages less foreign investors leading to lower foreign exchange rates.
The political and financial stability of a country gives boost to its foreign exchange rates worldwide.
Increasing terms of trade between countries result in escalating revenues made from exports. As a result foreign exchange rates also go up.
Usually the global banks have to put up with the clients withdrawal and payments and to liquefy their assets, they in return put added interest on trading of currency. So whenever you buy currency from a bank, it would cost you more than buying it from an open market. Purchase of currency from bank suits more to investors who plan to save money in that bank so that they would get it back with added interest.
In Pakistan, foreign exchange rates are constantly soaring because economy of our country is unstable at the moment which keeps on devaluing Pakistani Rupee. For exchange of high valued currencies like Dinar, Dollar and Pound, Euro etc Pakistanis get lesser amount in return. The more in benefit are the investors who keep money in international banks and get doubled or tripled amount back.
Today (17 Oct 2019) Current Forex / Foreign exchange rates in Pakistan. Current rate of US Dollar USD To PKR is 156.44 Rs, Australian Dollar AUD To PKR is 106.04 Rs, Canadian Dollar CAD To PKR is 118.47 Rs, Euro EUR To PKR is 173.17 Rs, Japanese Yen JPY To PKR is 1.44 Rs, U.A.E Dirham AED To PKR is 42.60 Rs, UK Pound Sterling GBP To PKR is 199.75 Rs, China Yuan CNY To PKR is 22.04 Rs, Saudi Riyal SAR To PKR is 41.72 Rs.
I have 15000 US dollars and I want someone for currency exchange. There is a good list of forex exchange rates companies. Recommend me one.
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