exchange rate

Meanings

1. 1nouncountable

   The price of one country's money in terms of another country's money.

   Grammar: Countable; use 'an exchange rate' or 'exchange rates'.

   Patterns

   • the exchange rate between A and B
   • the exchange rate for something
   • a high/low exchange rate

   The exchange rate between the dollar and the euro has changed a lot this year.

   What's the exchange rate for pounds to dollars today?

   A weak exchange rate makes exports cheaper.

2. 2nounsingularbusinessfinance

   The system or market in which currencies are traded and their values are set.

   Grammar: Used as 'the exchange rate' to mean the whole system, often in economic contexts.

   Patterns

   • the exchange rate system
   • under the exchange rate

   The country moved to a floating exchange rate in the 1990s.

   Investors watch the exchange rate closely for signs of instability.

Word forms

Common combinations

exchange rate mechanism

The European Exchange Rate Mechanism was set up to reduce currency fluctuations.

fixed exchange rate

A fixed exchange rate can help control inflation.

fluctuating exchange rate

A fluctuating exchange rate makes planning difficult for importers.

exchange rate risk

Companies hedge against exchange rate risk when trading abroad.

Synonyms and how they differ

rate of exchange

A more formal or old-fashioned way to say the same thing, often used in bank documents.

conversion rate

Focuses on the number used to change one currency into another, not the market price itself.

Word family

exchange verb

To give one thing and receive another in return.

exchangeable adjective

Able to be exchanged for something else.

Commonly confused: exchange rate or interest rate?

Practice

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