The Role of Foreign Currency Exchange Rate

Foreign exchange rates are often interpreted as the amount of the currency of a country (eg Rupiah) that must be sacrificed in / out to get one unit of foreign currency (dollar for example). So in other words. If we use the example of the dollar and rupee, the exchange rate is the rate that describes the number of dollars that must be spent for one unit medapat dollar within a certain time. The issue of foreign exchange rates began to emerge when the economic transaction has begun to involve the two countries (currency) or more, of course, as a tool to bridge the gap of currencies in each country.

Stock Exchange (UK: foreign exchange market, forex) or abbreviated foreign exchange is a type of trading or currency trade transactions of a country against another country's currency (the currency pair / pair) that involves major financial markets in the world for 24 hours continuously. Rotating movement of foreign exchange markets ranging from New Zealand and Australian markets which took place at 05:00 to 14:00 pm, continued into the Asian markets of Japan, Singapore, and Hong Kong which took place at 07:00 to 16:00 pm, to European markets namely Germany and the UK which took place at 13.00 -22.00 pm, up to the U.S. market which took place at 20:30 to 10:30 pm. In the historical development, the central bank's countries with foreign exchange reserves that can be defeated by even the largest power of free foreign exchange market.

 According to the survey BIS (Bank for International Settlements, the world's central banks), conducted in late 2004, the foreign exchange market transactions reached more than USD $ 1.4 trillion per day. Given the level of liquidity and accelerating the movement of these high prices, foreign exchange has also become the most popular alternative because the ROI (return on investment or ROI) and profits to be obtained can exceed the average trade in general. As a result of rapid movement, then the foreign exchange market also has a high risk.

Comment : i think the exchange range is important in the system economi in the world. If the goverment can control the system clearly it can make the economi up and make the eksport import balanced.