Currency exchange can be defined in two ways; first as the procedure of converting one type of currency to another and second as an official building designed for exchanging currency of one type to another conveniently.
every country around the globe have a fixed currency for its native citizens like dollar, rupees, euro, cent and many more along with the currency exchange rates for its visitors and travellers .while travelling from one country to another, a person needs to exchange his or her country’s currency with the other in order to buy, eat and travel conveniently in the visiting country.
What are exchange rates?
The rates can be defines simply as the amount of one country’s currency with respect to the other country. They determine the value or rate at which a currency is exchanged with the other country’s currency or an economic zone.
There are different types of well spread exchange rates which are as follow;
- Fixed exchange rate system: in order to ensure foreign trade’s stability, the exchange rates for a country’s currency are fixed by the country’s government.
- Flexible exchange rate system: in this system of bureau de change, the currency’s value is allowed to fluctuate as per the demands and supplies of different currencies in the market of foreign trade where there is zero interference by the government.
- Managed floating rate system: a hybrid of the other two exchange rate systems, this system shows fluctuation in the currency’s value according to market influences and central bank forces. the foreign exchange market is intervened and influenced by the central banks
Factors affecting the exchange rates
Some of the factors which contribute immensely in affecting the rates of bureau de change are balance of payments, interest rate level, inflation factor, fiscal and monetary policy, venture capital, government market intervention, economic strength of a country as well as the emerging market systems.
In India, one can exchange the currency by personally visiting any Indian bank with the relevant documents and identity proofs. The exchangers have the option of comparing the exchange rates as well as the bank services fees with the money changers of their towns like the Sharif exchange.
The necessary documents required for carrying out the process of bureau de change in India are an Indian passport with maximum transactions of more than Rs. 25000, original and a copy of the exchanger’s driving license or voter id, or aadhar card or a pan card for verification.