When travelling abroad it is necessary to exchange British
money for the currency of the country being visited: dollars
in the USA, francs in France, marks in Germany, yen in Japan,
and so on. The rate at which you can buy the foreign currency
is known as the exchange rate.
For example, when the exchange rate for the US dollar was
quoted as $1.54 to £1, a traveler could exchange £250
for 250 x $1.54 = $385. Or an American coming to England with
$462 could buy £(462 / 1.54) = £300.