Exchange Rates and Currency Exchange
This page discusses how to calculate currency exchange rates and exchange rates. An exchange rate is the value of a state's currency's value compared to another state's. In addition to the rates we examined previously, there are other exchange rates, known as the onshore and offshore rates. An onshore rate favors the national currency traded within its borders. In contrast, an offshore rate is slightly higher for national currency traded outside the state's borders. What is the relationship between restricted currency and the offshore exchange rate?
Paths To Success
Example 7.3.1: A Straight Currency Conversion
Strictly using the mid-rates from the cross-rate table presented earlier, if you wanted to convert 
into 
for your spring break vacation in Cancun, Mexico, how many Mexican pesos would you have?
Solution
Take Canadian currency and convert it into the desired Mexican currency.
What You Already Know
Step 1:
The amount and the exchange rate are known:
Current Currency = 
Exchange Rate = 1
How You Will Get There
Step 2:
No buy or sell rates are involved. Skip this step.
Step 3:
Apply Formula 7.4.
Perform
Step 3:
Desired Currency = 
You have 
Mexican pesos available for your spring break vacation.