According to Eng, Lees and Mauer (1995: 84), the notion of forex (foreign exchange) is: "Any asset or financial claims denominated in a foreign currency."
Meanwhile, according to FASB 52, foreign exchange can be defined as: "Acurrency other than an entity's functional currency" Basically the two terms above are the same, which can be concluded that foreign exchange is the exchange of a country's currency against other countries.
Comparison between the value of a country's currency against other countries pose a value, called the foreign exchange rate (foreign exchange) or the foreign exchange rate
Definition of foreign exchange rate according to Eng, Lees and Mauer (1995: 99) is, "The price of foreign currency in domestic measured money". Another understanding of foreign exchange rate by Floyd A. Beam is, "Foreign exchange rates are Essentially prices for currencies Expressed in units of other currencies". (Floyd A. Beam 2003: 390)
From the definition above can be concluded that the exchange rate is the exchange rate of the currency of a country against other countries. In foreign exchange transactions there are some common forms of transactions. Floyd A. Beam found: "There are three forms of foreign exchange trading: outright spot (delivery now), outright forward (delivery in the future), and swaps." (Floyd A.Beam 2000: 490)
From these statements it can be concluded that there are three main forms of transactions, namely:
a. Spot exchange, in which the transaction occurred with the release of the value date, usually two business days after the transaction occurred.
b. Foreign exchange transactions that occurred with the release at some point in the future.
c. Swap, which is the purchase and sale transactions simultaneously (continuous) on the date of maturity different.
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