currency exchange rate: The rate of exchange of one currency for another in a monetary conversion; which may be fixed, or may float, in the marketplace. This should not be confused with the indexed value of the private currency, which measures the ratio of the purchasing power of the private currency to the government-issued currency. As such, the indexed value of the MR$ may be $1.15, but the floating currency exchange rate for USD may be $1.10. While we ask the merchant to accept the MR$ at $1.15 for the purchase of goods and services, we might also agree to convert the MR$ for $1.10 in the government-issued currency. The difference, between the currency exchange rate and the indexed value, then provides the currency exchanger a financial incentive to provide the monetary conversion service; thereby compensating him, or her, for holding USD to meet the monetary conversion request.