Today, LTG GOLDROCK will share with you what the specific function of foreign exchange is ~
The generation of foreign exchange is an inevitable result of internationalization of commodities and capital flows.From the reasons for foreign exchange, we can see the functions of foreign exchange.With the development of social productivity, social division of labor and commodity economy, the rapid development of international trade and transnational payment, and the significance of capital output is becoming increasingly important.International commodity trade, borrowing activities and external investment, as well as the exchanges and exchanges between politics, military, social, scientific and technological such as politics, military, social, and scientific and technological in various countries, all will cause international economic exchanges.Demand for foreign exchange.
Foreign exchange has become a tool for international economic exchanges. Foreign exchange represents a prime minister's right to pick up foreign goods and labor. It is a practical resource. It is widely used in international trade exchanges and economic activities.effect.The function of foreign exchange is specific in the following aspects:
Foreign exchange, as a device and payment tool for international settlement, facilitates international settlement.International settlement is the cleanup of debt and debt in economic and trade exchanges between different countries in the world. Due to the different currency systems of various countries, if a currency is not an international payment method, only the use of foreign exchange tools can ensure the smooth progress of international settlement.
Through international exchange, the international transfer of purchasing power can make the currency circulation between nations.Due to the different currency systems of various countries, the currency of a country cannot often be circulated in other countries. In addition to using the international confirmation of clearing methods, the purchasing power of different countries cannot be transferred.With the development of foreign exchange business, foreign exchange is generally accepted by countries as international payment methods, and foreign exchange has become an international purchasing power.A country holds a certain number of foreign exchange, that is, it has the same number of international purchasing power.The country can use the goods, labor services, and repayment of foreign debt required for the purchase of these foreign exchange in the international market to convert a country's purchasing power into international purchasing power.Foreign exchange circulation internationally, it provides possible international exchange of goods, and has expanded the scope of commodity circulation.
Promote the development of international trade.The use of foreign exchange for international settlement can not only save the cost of transportation cash, but also avoid risks.In particular, the use of various credit tools in international trade has promoted the development of international commodity exchange and expanded international trade.
It facilitates the adjustment of the relationship between funds and supply and demand internationally, and uses the function of regulating the balance of funds.The economic development of countries around the world is unbalanced, the balance of funds is different, and the expression of contradictions between supply and demand of funds is also different. Objectively, there are requirements for regulating the remaining funds.Developed countries often have excess funds, while developing countries often have a shortage of funds.Foreign exchange can accelerate the turnover of funds in the world, helping international investment and capital transfer.
Foreign exchange has the function of balanced international revenue and expenditure as an international reserve.If a country's international revenue and expenditure deficit, it can be used to make up for its foreign exchange reserves.The more foreign exchange reserves in a country, the stronger its international settlement capacity.In today's international economic activities, countries will not directly repay debts with gold, make up for international revenue and expenditure deficits and foreign exchange shortages. Instead, they will sell the gold held in the international market in exchange for foreign exchange to pay for debt.
Foreign exchange has the function of saving circulation costs and making up for insufficient circulation.As an international payment method, gold and silver are a waste of human labor and valuable resources.Taking foreign exchange as an international payment method, it can achieve international debt and debt cleaning and capital transfer by the various bills represented by electricity and exchange by telegram, letter, or ticket exchange.At the same time, the parties to the international trade can facilitate the integration of funds through buying and selling different currencies and notes on banks or exchanges.After endorsement, the long -term acceptance bill has the function of circulating in the international financial market, so that foreign exchange as a means of payment to make up for the lack of circulation.
The foreign exchange held by a country is a symbol of its wealth and economic strength.As an international purchasing power, a foreign exchange held by a country represents a country's foreign debt, which is not only conducive to improving the country's international economic status, but also conducive to the internationalization of the local currency, making the country's currency a strong currency.
