![]() These currency exchange platforms charge you an exchange rate that determines the value of your currency in a foreign currency. To buy or sell the foreign currency, you need to provide some documents to the currency exchange platform to verify your identity. ![]() Before understanding the documents required for money exchange, let us understand what are the factors that affect the currency exchange rate and if all the countries have exchange rate policies. There are two types of money exchange rates flexible and fixed exchange rates. For some countries, the exchange rates change depending on some factors, while some countries’ currency exchange rates change very rarely. Most country’s currency exchange rates are determined by the foreign exchange market. The exchange rates fluctuate very often and the government doesn’t really intervene to keep the exchange rates fixed. Hence, this type of exchange is called a flexible exchange rate. Some countries’ currency exchange rates like Saudi Arabia change very rarely. The exchange rates change only when the government instructs the banks or currency exchange platforms to do so. ![]() Hence, it is called the fixed exchange rate. There are a few factors that determine the exchange rate of a country, and because of these factors, the demand for the currency is determined. The higher the interest rate is paid by the Central Bank of the country, the greater the value of the currency will be. The investors will exchange currency for a higher-paying currency. ![]()
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