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Simply put, low inflation rates means higher demand in market including demand from foreign markets. This is translated in the price quoted for imported items. Thus, as import is increased so does money outflow. This means more foreign currency are needed (bought) to buy imported items and relatively the value of local currency rates will be depreciated.
Wiki User
∙ 15y ago
Wiki User
∙ 14y agoIf Inflation takes place, our exports become expensive, while our imports become cheaper. Therefore, the price in our local economy is rising so is the value of currency, therefore appreciating exchange rates.
Wiki User
∙ 13y agoDifferent countries have different rates of inflation, which are an important factor in determining exchange rates.
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How do interest rates and inflation affect real estate in south Africa?
explain how do intrest rates and inflation affect the real estate
What will happen to the exchange rate if a country has low inflation and rapid economic growth?
Exchange rates would most likely stay the same. If inflation increase or decreases I believe that is where exchange rates will more so be affected
What are the factors that affects financial instruments?
Many factors affect the financial market, particularly the stock market. Examples include inflation and deflation, interest rates, foreign markets, and exchange rates.
How does inflation affect interest rates?
if an interest rate is high, it is likely that inflation is also high. Generally, one doesn't affect the other so much as measure the other.
How exchange rates are set?
It's determined by the global currency exchange market, which takes into account factors like GDP, unemployment, inflation, and the like.
How does exchange rates depreciation affect the south African economy?
Exchange rates depreciation affect the south African economy because it leads to changes in inflation in the country' economy .
How do interest rates and inflation affect real estate in south Africa?
explain how do intrest rates and inflation affect the real estate
What will happen to the exchange rate if a country has low inflation and rapid economic growth?
Exchange rates would most likely stay the same. If inflation increase or decreases I believe that is where exchange rates will more so be affected
What are the factors that affects financial instruments?
Many factors affect the financial market, particularly the stock market. Examples include inflation and deflation, interest rates, foreign markets, and exchange rates.
What has the author Thomas O'Connell written?
Thomas O'Connell has written: 'Inflation and exchange rates' -- subject(s): Econometric models, Inflation (Finance), Wage-price policy, Foreign exchange
What has the author Marc Klau written?
Marc Klau has written: 'Exchange rate regimes and inflation and output in Sub-Saharan countries' -- subject(s): Foreign exchange administration, Foreign exchange rates, Inflation (Finance)
What has the author Jeannine N Bailliu written?
Jeannine N. Bailliu has written: 'Exchange rate pass-through and the inflation environment in industrialized countries' -- subject(s): Econometric models, Foreign exchange rates, Prices, Effect of inflation on, Inflation (Finance), Foreign exchange
How does inflation affect interest rates?
if an interest rate is high, it is likely that inflation is also high. Generally, one doesn't affect the other so much as measure the other.
What has the author Wanjoong Kim written?
Wanjoong Kim has written: 'Impacts of exchange rates on employment in three Asian countries' -- subject(s): Foreign exchange rates, Effect of inflation on, Unemployment
How exchange rates are set?
It's determined by the global currency exchange market, which takes into account factors like GDP, unemployment, inflation, and the like.
Why do money exchange rates change frequently?
Money exchange rates change frequently because finances around the world also change frequently. There are six things that determine exchange rates which are interest rates, inflation, account deficits between countries, public debt, terms of trade between countries, and political and economical stability. As these things fluctuate, exchange rates fluctuate.
Inflation rates?
inflation
