Why Are The Exchange Rates For Buying And Selling Currency Different?

[kathrynfrancis1]

This question is for a class I’m taking called The Economic and Global Environment.

[Buenchico]

Almost everyone who buys and sells foreign currencies is in it for profit. (The only exception might be governments and central banks who've sometimes got other motives, such as seeking to stabilise a currency). If money was bought and sold at the same rate no profit would be made. (In practice a loss would actually be made because traders have their own operating costs to pay). So the system would break down if there wasn't a margin between 'buy' and 'sell' rates.

[Old_Geezer]

Was that a genuine query ? I ask because I'm wondering if you're on the right course.

[Cloverjo]

Just what I was thinking, O_G.

[Cloverjo]

Sorry, I resurrected an old thread.