The following article will guide you to learn about how is the rate of exchange between two currencies determined. Foreign Exchange Rates: Thus exports and imports of goods between nations with different units of currency introduce a new economic factor: the foreign exchange rate, which gives the price of the foreign currency in terms of domestic currency. The two important [...]
The following article will guide you about how is currency convertibility done. Also learn about the IMF rules on convertibility. In international transactions currencies of different countries are used. Some of the world's currencies are accepted in all types of transactions throughout the world. These are called convertible currencies. Examples are US dollar, Swiss franc, French franc, British pound, Germany [...]
The following points highlight the four main factors affecting the exchange rate. The factors are: 1. Differing Rates of Inflation 2. Capital Movements 3. Structural Changes 4. Role of Speculation. Factor # 1. Differing Rates of Inflation: True enough, the exchange rates of countries that inflate fastest will be depreciating, while the exchange rates of countries that inflate slowest will [...]