February 26, 2008
On Forex Rates
Price quotation that state how much of one currency is needed to purchase another currency are called forex rates. Different rates are given by different traders and institutions, provided that the currency in question is not pegged to any other currency or is pegged to the perceived value of another commodity, like gold for instance. There are several kinds of methods to determine forex rate. These include floating schemes (the most common), floating pegged schemes (less common, but used by countries such as China and Malaysia) and pegged schemes, where currencies are directly exchangeable for an amount of money set by a country’s monetary board or central bank.