What is a Conversion Rate?

Definition of Conversion Rate: This rate is generally used for the foreign exchange rate, Forex trading rate or exchange rate. However, the conversion rate can also affect the environment of the retail market. In those examples, it is indicated as a sole figure rather than a bid or “Ask” quote, as the customers generally use it for converting the currency while traveling from one place to another. These easy figures may be published in the newspapers or on the windows of the bank and reflect the retail more than the counter costs on the ask part. There are large number of factors influencing the retail exchange rate of the bank like inflation, interest rates, internal prices, inventory, volatility and the financial system in every country. The bank’s Treasury Department set the rates regularly.