Asked in Economics
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards,...
Asked in Currency Conversions
What is the current money exchange rate in Canada?
exchange rate can$ to SA Rand
Asked in Supply and Demand
What is the difference in how the exchange rate reflects the supply and demand for the currency between a flexible-exchange rate system and a fixed-rate exchange system?
flexible-exchange-rate system, the equilibrium exchange rate reflects the supply and demand for the currency. Under a fixed-exchange-rate system, a country's central bank intervenes by buying or selling its currency to keep its foreign-exchange rates ...
Can international business operate more easily in a fixed exchange rate system or in a flexible exchange-rate syatem?
An international business will operate more easily in a fixed exchange rate system. Knowing what the equivalency of goods will allow for predetermined forecasting, however, a fixed rate decreases the opportunity for profits. ...
Asked in Economics, Currency Conversions
What is the difference between fixed exchange-rate system and flexible exchange-rate system?
A fixed exchange rate denotes a nominal exchange rate that is set firmly by the monetary authority with respect to a foreign currency or a basket of foreign currencies Floating or Felxiable Exchange rate is determined by the supply and demand for currency and it self adjusting free tansaction. ...
What is the difference between fixed and flexible exchange rates?
Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range. ...
What are Advantages and disadvantages of fixed rate system?
Advantage of fixed rate system is that there is no exchange risk, the currency is stable and the absence of currency crisis. ...
Asked in United Arab Emirates
Does United Arab Emirates have a fixed exchange rate?
Yes, it is fixed against the American Dollar at a rate of 3.76 AED = 1 USD ...
Is a fixed exchange rate better than a floating exchange rate?
Such statements cant be made. it depends on the economy. To maintain a fixed exchange rate a country is required to have good foreign exchange reserves so that every time currency moves away from the fixed rate the foreign exchange cab be sold or bought in market. Floating exchange rate is more real as it makes exchange rate according to the strength of the country. Like for India currency is appreciating because country is growing but is also makes exporters worse off...
Asked in Economics
What is the difference between a floating and a pegged exchange rate?
pegged exchange rate is officially fixed in terms of gold or any other currency in foreign exchange. Floating exchange rate is flexible rate in which value of currency is allowed to adjust freely determined by the supply & demand of foreign exchange ...
Asked in Mortgages
Which is the lowest fixed rate mortgage in the market?
The lowest fixed rate mortgage in the market is 2.99% in Canada, and if one goes for a five year fixed mortgage, it is only 2.75% in Canada. One can try to compare rate by going on the sites of various banks. ...
What are fixed exchange rate system and currency board system?
A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate. Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep...
Asked in Business & Finance
How a government can maintain fixed exchange rate?
If a government were to fix an exchange rate and stick to it, it could mean total economic failure for a country. Having the exchange rate fluctuate somewhat gives a chance for economic growth. ...
At present India is following which exchange rate?
India followed a 'fixed exchange rate' system till the economic crisis of 1991. At present India is following 'floating exchange rate' following link will help you to understand: (http://indianblogger.com/foreign-exchange-rate-determination-in-india/) thank you ...
Asked in Economics
Why a cut in government spending has a larger effect under a fixed exchange rate system and perfect capital mobility than in a closed economy?
fixed and floating exchange rates
What occurred after the US dollar was no longer convertible?
The fixed-exchange-rate system collapsed.
What is the difference between spot and forward exchange rate?
In forward exchange rate, the rate is booked in advance for a fixed amount and period,which will remain unchanged in case of any market fluctuation or deceleration.In fact forward exchange rate booking is done to protect or guard against volatile market condition. In spot exchange rate, the exchange rate prevalent on a particular date is booked for immediate effect. ...