What is the currency exchange rate?

Currency exchange rate is the rate at which a nation's currency is exchanged for another, that is, the price of a currency in terms of another. It is also known as currency quotation, forex rate, or the foreign exchange rate.

In an exchange rate, a currency can either be a base currency and a counter currency. When quoting directly, the foreign currency is the base currency and the domestic currency is the counter currency. In an indirect quotation, the foreign currency is the counter currency and the domestic currency is the base currency. Factors that influence the exchange rate include inflation, the balance of payment, interest rates and government policies.