Three basic characteristics of foreign exchange
Because in international exchange, a country's commodity market can't be exchanged for any other country's currency, only some payment means and credit instruments acceptable to all countries, such as foreign currency, foreign currency securities, foreign currency payment vouchers and so on. Therefore, the International Monetary Fund (IMF) stipulates that foreign exchange is a creditor's right that can be used in the form of bank deposits, securities of the Ministry of Finance, and long-term and short-term government securities when the balance of payments is in deficit. Therefore, foreign exchange has the following three characteristics:
First, affordability, which must be expressed in foreign currency;
Second, convertibility,
Third, availability must be a monetary creditor's right that can be repaid abroad.
Advantages of foreign exchange
1, with large turnover and high market transparency. The average daily turnover of the global foreign exchange market is $4 trillion. There is no banker in such a big market, and foreign exchange investment is aimed at the national economy. Data and news are shared around the world.
2. Flexible leverage and light transaction cost. Adjustable leverage ratio can effectively reduce transaction costs and improve capital utilization;
3, two-way trading, profit is not limited by market conditions, foreign exchange transactions can be long or short, regardless of bear market or bull market, as long as the market fluctuates, there will be opportunities for profit;
4.T+0 trading, 24-hour market. The 7x24 uninterrupted foreign exchange market in the world is different from stocks. Foreign exchange is a T+0 transaction and can be bought and sold at any time;
5. The risk is controllable, and the stop loss and limit point can be preset. By setting stop and limit points, traders can control losses or lock in profits in time;
6. the transaction is rapid, and the immediate transaction does not need to wait for the usual market conditions. All orders can be closed at a specified price or within a specified range.
China's foreign exchange
According to the Regulations on Foreign Exchange Management revised and promulgated by China1June 1997, foreign exchange refers to the following means of payment and assets expressed in foreign currency that can be used for international settlement:
(1) Foreign currencies, including banknotes and coins;
(2) Foreign currency payment vouchers, including bills, bank deposit vouchers, corporate bonds, stocks, etc. ;
Foreign currency securities, including government bonds, corporate bonds and stocks;
(4) Special Drawing Rights and European Monetary Units;
(5) Other foreign exchange assets.
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