If you have to travel outside the country or purchase goods online from companies based outside your country, you will need foreign currency. You may need to understand exchange rates and how your money is converted into other currencies.
An exchange rate is a rate at which one country’s currency can be traded for another country’s currency. They exist so governments and firms can do business and pay in the appropriate currency.
Determination of Exchange Rates
There are several different ways an exchange rate for a currency can be set. They are: