GLOSARY

GLOSARY -Is in the form of checks or drafts.

D Foreign exchange rate – the process by which people

in different countries pay each other by exchanging
Draft - is a written order to pay a certain sum of money.
different types of money.
E
Foreign exchange market - is where the buying and
Exchange rate - is determined by either the selling of drafts or bills of exchange takes place.
government or market forces, or both but should all
I
delve on the idea that monetary authorities intervene in
the foreign exchange market to prevent erratic exchange International debts - are settled through the use of
rate fluctuations.to somebody at a definite date. These foreign exchange is the credit instrument used in pay.
drafts or bills of exchange are bought and sold in the
M
market called the foreign exchange rate.
Managed exchange rate system - the exchange rate
-Is the rate or price at which one country’s currency is
is basically determined by the supply and demand by the
exchanged for the currency of the other.
foreign currency, but the government intervenes to affect
F the exchanged rate.
Fixed exchange rate system - characterized by the
government determining the rates of currencies as well
as making necessary adjustment to ensure the continuity
of these rates at a given period of time.
Flexible exchange rate system - characterized by the
non-intervention of the government and its determined
by the supply and the demand for the foreign currency.
Foreign exchange - refers to the credit instrument
used to pay or settle international debt. Meanwhile, a
draft or bill of exchange is a written order to pay a
certain amount of money to a someone definite date.