Before many novice investors to enter the currency markets, it is not clear why forex trading can be used, and these can be used to trade foreign exchange reserves and we often say what difference does it make? Today ATFX small series and everyone kind of what to talk about foreign exchange? What role do?
What Forex is?
Broadly speaking: a country has all the assets denominated in foreign currencies. It refers to currency operations specialized in flows between countries as well as the national currency convertible into a currency of another country, in order to pay off debt, debt relations among one of them. In fact, monetary administrative authorities (central banks, monetary authorities, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, the Ministry of Finance Treasury bills, short and long term government bonds and other debt possessed in the balance of payments deficit that can be used .
In a narrow sense: expressed in foreign currency, as universally accepted, it can be used for a variety of international means of payment credit and debt settlement. Must have three characteristics: affordability foreign exchange (foreign currency assets must be represented), (claims must be in a foreign country can be compensated) the availability and transsexuals (must be freely convertible into foreign currencies other means of payment assets).
By source use is divided into: trade foreign exchange, foreign exchange and financial non-trade foreign exchange
Forex trading, also known as in-kind trade foreign exchange, foreign exchange refers derived from or used to import and export trade, an international means of payment that is due to the circulation of commodities between international formed.
It refers to all non-trade foreign exchange trading foreign exchange foreign currency other than that everything is not derived from or used in foreign exchange, such as foreign exchange services, import and export trade of foreign exchange remittances and donations and so on.
Financial and foreign exchange and foreign exchange trading, different non-trade foreign exchange, foreign exchange is part of a financial asset, such as interbank trading in foreign exchange, neither from the visible trade or invisible trade, nor for visible trade, but for various currencies management positions and mercy.
What is the role of foreign exchange?
Promote economic development, international trade.
2. international funds transfers surplus and deficiency.
3 is an important part of a country's international reserves, the main international means of payment but also pay off debt.
The above is presented on the kind of foreign exchange, foreign exchange is a lot of species, there are different types according to different division, but for foreign exchange investors, we mainly divided according to their use, investors want to know after, can just grasp the risk of foreign investment.
