FOREIGN EXCHANGE MARKET

The market where different currencies can be bought and sold is called the foreign exchange market.9 Out of the trades in different currencies, the exchange rate of the currency is determined by the economy.10 This is an institutional framework for the exchange of one national currency for another.11 This is particularly correct either in the case of a free float exchange (i.e., floating currency) regime or is a managed or hybrid exchange rate system. It is altogether not allowed either in a fixed currency system or a hard fix (in a hard fix this happens once the currency to which the hard fix has been done itself starts fluctuating).‌‌