The exchange rate is what you need to be concerned with whenever you need to buy something from another country which does not accept the same currency as the one in your country. This is obviously even more important if you travel to another country.
It is essentially the price of one type of paper money (or electronic money, as it may be) in another type of paper money.
Exchange rates are commonly quoted in newspapers, financial magazines, at money changers and in banks.
There usually is a quoted bid-ask spread (or buy-sell spread) when you ask for an exchange rate. The difference between these two prices is the profit that the money changer you are dealing with makes when making the exchange for you.