Foreign trade: foreign exchange and balance of payments

Abstract

A Foreign exchange market is a market in which currencies are bought and sold. It is to be distinguished from a financial market where currencies are borrowed and lent. Foreign exchange consists of gold, foreign. currencies and credit balances, foreign securities (bills, promissory notes and other credit instruments) foreign assets (titles to property , stocks and shares ). The differences between the values of exports and imports of goods and services between countries take the form of, and are financed with foreign ex change .