The price of one currency in terms of another. A par exchange rate is that agreed between governments, or registered with a central authority such as the International Monetary Fund. A market exchange rate is the actual price on foreign exchange markets. Market prices of foreign exchange are liable to fluctuate, between narrow margins in a fixed exchange rate system, and much more widely under a floating or flexible rate system. In countries with exchange controls, there may be multiple exchange rates: the price of foreign currency varies according to the use the central bank believes a purchaser intends to make of it. In countries with convertible currencies there is at any one time only a single exchange rate with any given foreign currency. Because of transaction costs and some element of monopoly in dealing with small buyers and sellers of currencies, banks generally charge more to sell foreign exchange than they offer to buy it, particularly in the case of small amounts and low-denomination notes. In the markets used by banks and large commercial organizations the range of prices is much smaller. All this refers to nominal exchange rates: these are contrasted with real exchange rates, which compare the relative prices of different countries’ products. A country’s real exchange rate may change either through a change in its nominal exchange rate, or through a domestic inflation rate faster or slower than that of its trading partners. See also crawling peg exchange rates; effective exchange rate; fixed exchange rate; floating exchange rate; misaligned exchange rate; multiple exchange rates; realignment of exchange rates.