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Three major factors that cause a country's currency to appreciate or depreciate relative to another's * Differences in income growth among nations will cause nations with the highest income growth to demand more imported goods. The heightened demand for imports will increase demand for foreign currencies, appreciating the foreign currencies relative to the domestic currency. * Differences in inflation rates will cause the residents of the country with the highest flation ratet to demand more imported(cheaper) goods. If a country's inflation rate is higher than its trading partners', the demand for the country's currency will be low, and the currency will depreciate. * Differences in real interest rates will cause a flow of capital into these countries with the highest available real rates of the interest. Therefore, there will be an increased demand for those currencies, and they will appreciate relative to the currencies of countries whose available real rate of return is low. By
Mujeeb
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When exports exceed imports will the us dollar appreciate or depreciate?
Appreciate.
How does the interest rate in a country affect equilibrium currency prices?
If a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors. This answer sounds exactly logical as I think about it, yet, in economics books, under the uncovered interest rate parity model, a country with a higher interest rate should expect its currency to depreciate. I would agree with this proposition in the long run an expensive currency will hurt exports... but in the very short run... let's say once the CB declaires a rise in interest rate, by how much should one expect the currency to appreciate? is there any formula for this?
What happens when a nation's currency depreciate?
Exports increase. Imports decrease. FDI increases. Foreign capital investment increases. Economic growth rises. Besides these positives there is the negative effect and thats inflation which increases.
Why does rupee depreciate against dollar?
Well, this is not something that can be answered in a single sentence. But to give an overall picture without getting into the deeper details, the reason would be: "Exchange Rate is nothing but the price of a Currency in the International Market. If the demand for the dollar is higher than its supply, the Rupee should depreciate. If it is the other way round, it should appreciate" The Key reason for this would be the global economic scenario. The economic situation, world over is very volatile. People are worried about the safety of their investments. Because of risk aversion on the part of people, US Dollar regained its place as a Safe Haven. People still believe that the US Dollar is much safer than any other currency in the world and hence are accumulating the US Dollar. This effectively means that, the demand for the Dollar is going up which essentially means the price of other currencies (Exchange Rate) may be affected.
Why would the Rupee Depreciate against the US Dollar?
Well, this is not something that can be answered in a single sentence. But to give an overall picture without getting into the deeper details, the reason would be: "Exchange Rate is nothing but the price of a Currency in the International Market. If the demand for the dollar is higher than its supply, the Rupee should depreciate. If it is the other way round, it should appreciate" The Key reason for this would be the global economic scenario. The economic situation, world over is very volatile. People are worried about the safety of their investments. Because of risk aversion on the part of people, US Dollar regained its place as a Safe Haven. People still believe that the US Dollar is much safer than any other currency in the world and hence are accumulating the US Dollar. This effectively means that, the demand for the Dollar is going up which essentially means the price of other currencies (Exchange Rate) may be affected.
Is it correct to say that the rand can appreciate or depreciate?
Assuming you are referring to the South African unit of currency, YES, the rand can appreciate OR depreciate.
What is a antonyms for appreciate?
Depreciate.
When exports exceed imports will the us dollar appreciate or depreciate?
Appreciate.
Suppose that US incomes rise relative to British incomes Then?
The dollar will depreciate and the pound will appreciate.
What will happen to the import if the exchange rate increase?
Usually, the currency will depreciate (lose value).
What is surplus on revaluation of asset?
Surplus on revaluation of assets means that on the even of revaluation, more assets has appreciate in their value then depreciate.
Why do people invest in low return funds even though their money will depreciate more than they will profit?
people investing in low return fund so as to minimize risk especially risk associated with depreciate of currency value
How does a currency appreciate?
An increase in the value of one currency relative to another currency. Appreciation occurs when, because of a change in exchange rates; a unit of one currency buys more units of another currency.
How does the interest rate in a country affect equilibrium currency prices?
If a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors. This answer sounds exactly logical as I think about it, yet, in economics books, under the uncovered interest rate parity model, a country with a higher interest rate should expect its currency to depreciate. I would agree with this proposition in the long run an expensive currency will hurt exports... but in the very short run... let's say once the CB declaires a rise in interest rate, by how much should one expect the currency to appreciate? is there any formula for this?
Do frequent flyer miles depreciate over time?
Frequent Flyer Miles do not depreciate over time. You can keep accumulating them for as long as you want without losing any, even if it means saving them for years.
How can you use the word depreciate in a sentence?
The value of the car will depreciate as soon as you drive it off the lot. Less spending made the value of many stocks depreciate.
If the inflation rate in the US is greater than the inflation rate in Sweden other things held constant the Swedish currency will?
The Swedish currency will appreciate against the US dollar.
