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Finance & Banking vocabulary · Interest & Exchange Rates

Exchange rate

Meaning in finance & banking, with examples

nounCore term

In finance & banking, exchange rate means: The price of one currency in terms of another, for example how many Turkish lira you need to buy one euro.

In Turkish: döviz kuru, kur

How it is used

Used daily on FX desks, in branches and in company finance teams. Banks quote a buying and a selling rate, and the gap is their margin. People talk about exchange rate risk and about the rate rising, falling or being fixed.

Example sentences

  1. The exchange rate moved sharply after the inflation data was published.

  2. We will use the exchange rate on the payment date to convert the invoice into euros.

Common collocations

  • exchange rate risk
  • buying and selling rate
  • fixed exchange rate
  • exchange rate movements
  • foreign exchangeThe buying and selling of currencies, or foreign currency itself. It is often shortened to FX or forex.
  • market riskThe risk of losses caused by changes in market prices, such as interest rates, exchange rates, share prices and commodity prices.
  • hedgeTo reduce the risk of losing money from changes in prices, interest rates or exchange rates, usually by taking an opposite position with derivatives.
  • interest rateThe price of borrowing money, shown as a percentage of the amount borrowed or saved for a period, usually one year.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Interest & Exchange Rates

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This page explains English vocabulary for learners. It is not financial advice.