Forex Glossary

Essential forex terms for Pakistan market users — 12 definitions covering trading, banking, and remittance concepts.

What Is Forex

Forex is the global marketplace where currencies are traded. Rates change constantly based on monetary policy, inflation, imports/exports, a...

Interbank rate is the wholesale exchange rate banks use between themselves. It is often lower than retail open market rates shown to consume...

Open market rate is the cash buying/selling rate offered by exchange companies and money changers. It usually includes spread and service co...

A currency peg fixes one currency to another, such as a dollar peg. Central banks maintain the peg by buying or selling foreign reserves. Ex...

Inflation is the increase in prices over time, reducing purchasing power. Persistent inflation can weaken a currency against stable economie...

A pip (percentage in point) is the smallest standard price movement in a forex quote. For most currency pairs, a pip is 0.0001 (one-hundredt...

Spread is the difference between the buying (bid) and selling (ask) price of a currency pair. It represents the transaction cost for the tra...

Leverage allows traders to control a large position with a small amount of capital. For example, 100:1 leverage means $1,000 can control $10...

A lot is the standard unit of measurement in forex trading. A standard lot is 100,000 units of the base currency. A mini lot is 10,000 units...

A central bank is the national authority responsible for monetary policy, currency issuance, and financial system stability. The State Bank ...

Remittance is money sent by workers living abroad to their home country. Pakistan is among the top remittance-receiving countries in the wor...

Hawala is an informal money transfer system that operates outside traditional banking channels. While historically significant in South Asia...