Foreign Exchange

Foreign Exchange Demand: This term refers to the desire and willingness of individuals, businesses, and governments to hold foreign currencies. It is influenced by factors such as imports, exports, interest rates, and economic stability.

Exchange Rates: These are the prices at which one currency can be exchanged for another. They determine how much of one currency you can get in exchange for another and are influenced by supply and demand in the foreign exchange market.

Balance of Payments: This is a record of all economic transactions between residents of one country with residents of other countries over a specific period. It includes trade balance (exports minus imports), capital flows, and financial transfers.