Forex Definition

Foreign exchange is (forex) is the foreign currency, such as U.S. dollars, British pounds, and so on. For example, when the two countries are holding international trade, each country needs foreign exchange to pay foreign equipment, which in the world is called foreign exchange trading. Thus, arises supply and demand of foreign exchange in the foreign exchange market. However, it could be in completing the transaction does not use both the country's currency, but the currency of a third country, such as the dollar. This could happen if the exporter or importer does not have the local currency of each country or currency of the two countries are very rarely traded because its currency is very weak. This means that the currency is the currency used it popular in both countries, such as the dollar.

Foreign exchange in terms of English language known money changer or foreign exchange, while the Arabic term al-Sharf called. In the dictionary al-Munjid fi al-Lughah mentioned that al-Sharf means selling money with other money. Al-Sharf harfiyah which means the addition, exchange, avoidance, or buying or selling. Thus al-Sharf is an exchange sale and purchase agreement with other currencies. Forex or al-Sharf freely defined as currency issued and used as legal tender in other countries. The discussion was also arranged in forex National Sharia Board Fatwa Council of Indonesian Ulama no: 28/DSN-MUI/III/2002, on Sale Buy Currency (Al-Sharf).

Subject - the subject of foreign exchange

1. Company. The company uses foreign exchange market to facilitate the implementation of the transfer of investment or commercial. They use the foreign exchange market for investment purposes.
2. Communities or individuals. Communities and individuals can conduct foreign exchange transactions to meet their needs.
3. Commercial Banks and Non-Bank. Commercial bank and non-bank operating in both the interbank market and customers. They serve customers who want to trade forex. This they make a profit by buying foreign currency on demand price (bid) and sell it back at a slightly higher price than the offer price (offer).
4. Broker or Broker. Broker or intermediary is a person or company whose job is to be the intermediary currency transaction activity.
5. Government. Government conduct foreign exchange for various purposes such as debt repayments to foreign countries, acceptance of foreign debt that had to be converted to the currency itself.
6. Central Bank. In many countries, central banks are not under the control of government, he is an independent agency in charge of stabilizing the economy.
7. Speculators and arbitrage. They are doing transactions in the foreign exchange market to make a profit. (by: hasna umama 11220007)