exchange rate

noun

Definition of exchange rate

: the ratio at which the principal unit of two currencies may be traded

Examples of exchange rate in a Sentence

Recent Examples on the Web

But when the exchange rate shifts, overseas buyers quickly come asking to renegotiate their pricing agreements, Mr. Lee said. New York Times, "U.S.-China Trade War Hits a New Phase, and a Boot Maker Trembles," 31 Aug. 2019 Some intricacies lay beyond me—a hazy blur of literature about floating exchange rates and reserve currencies addled my brain. Zach Helfand, The New Yorker, "The Economist Who Believes the Government Should Just Print More Money," 20 Aug. 2019 In today’s statement, the Chinese regulator resorted to the soothing power of poetic metaphor to tell the story of the tumbling exchange rate. Natasha Frost, Quartz, "Chinese officials take solace in poetry after the yuan hits 11-year low," 5 Aug. 2019 Apple effectively cut iPhone prices in China earlier this year after currency exchange rates had made its phones too expensive for many Chinese consumers. NBC News, "Apple's strength in China boosts sales despite trade tensions," 30 July 2019 Providing stability, efficiency, and security Cryptocurrencies, including the Libra, can prove attractive to consumers and businesses in economies suffering from high inflation, high interest rates and unstable currency exchange rates. Nir Kshetri, Quartz India, "Facebook’s cryptocurrency, Libra, could be a boon for developing nations like India," 26 June 2019 Providing stability, efficiency and security Cryptocurrencies, including the Libra, can prove attractive to consumers and businesses in economies suffering from high inflation, high interest rates and unstable currency exchange rates. Nir Kshetri, The Conversation, "Facebook’s Libra may be quite attractive in developing countries," 25 June 2019 State transactions remained at the official exchange rate, as did an annual foreign currency allowance per family member capped at $500 issued via special credit cards. Nabih Bulos, latimes.com, "What’s for sale at this outdoor market? Cold, hard cash," 11 July 2019 And in fact, Treasury’s most recent semiannual report in May on international exchange rate policies did not find China as a currency manipulator. Los Angeles Times, "U.S. labels China a ‘currency manipulator’ as stocks fall and trade war worsens," 5 Aug. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'exchange rate.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of exchange rate

1855, in the meaning defined above

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More Definitions for exchange rate

exchange rate

noun

Financial Definition of exchange rate

What It Is

An exchange rate between two countries' currencies indicates the value of one currency relative to the other.

How It Works

On June 16, 2010, the exchange rate between the dollar and the euro was 1.23 $/€. This means that to obtain one euro, you would need 1.23 dollars. Conversely, if you were about to take a vacation to Europe, you could take $1,000 to the bank and receive €813.01.

Exchange rates can be fixed or floating. If a country fixes its currency to that of another country, the exchange rate between those two currencies will not change. If a country has a floating exchange rate, the rate between its currency and any other currency will adjust to market conditions.

Why It Matters

The exchange rate between two currencies plays a major role in international trade and investment. For instance, if the dollar appreciates, or gains value, relative to the euro, Americans traveling in Europe will have greater purchasing power, but it will be more difficult for the U.S. businesses to export goods.

Changes in the exchange rate are subject to a wide range of factors, such as interest rates, price levels and expected future market conditions.

Source: Investing Answers

exchange rate

noun

English Language Learners Definition of exchange rate

: a number that is used to calculate the difference in value between money from one country and money from another country

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