Foreign Exchange Rate Determination and Management in Nepal
1. Introduction Foreign exchange , or forex , is the conversion of one country's currency into another. In a free economy, a country's currency is valued according to the laws of supply and demand. It is the price at which one currency can be converted into another. It represents the rate at which a firm may exchange one currency for another. Thus, the exchange rate is simply the amount of a nation’s currency that can be bought at a given time for a specified amount of the currency of another country. According to Foreign Exchange (Regulation) Act, 2019: "Foreign exchange" means a foreign currency, deposits, credits and balances of all types which are paid or received in a foreign currency, foreign securities and cheques, drafts, travelers cheques, electronic fund transfers, credit cards, letters of credit, bills of exchange and promissory notes which are in international circulation and are or can be paid in a foreign currency, and this term also includes any oth