Foreign Exchange is the mechanism of converting one unit of a currency into another currency.
A foreign exchange transaction, which is executed with an exchange rate prevailing on the date of transaction, is called a Spot Foreign Exchange transaction. The conversion of the currency or delivery of the contract will take place immediately or within 2 working days after the date of the transaction. The rate applied to such transaction is known as spot rate. This concept is called "Al Sarf" under Sharia'h Law.