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Usually, the currency will depreciate (lose value).
What else can I help you with?
How does exchange rate fluctuation affect the profitability of company engaged in import export?
The import export business relies on exchange rate. Fluctuations can greatly increase profits, or wipe them out altogether. This is what led to the establishment of the EURO.
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 effect of floating exchange rate if the government increase tariff?
increase in importation of the products
How does the exchange rate affect a company that does not import and sell good only in the US?
Overall when exchange rates go up (dollar is weaker) the the dollar buys less, so even though a business may not import directly itself, the strength of the dollar is less and cost of goods will rise. So costs increase, profits decrease...all else remaining the same of course.
If inflation rate increase what happen to bond's price?
if Infalation rate increase bond price will fall.
Will pound rate increase against rupee?
Currency exchange rates are continually fluctuating. It will increase and decrease periodically
What would happen to the dissolving rate of sugar in tea if you increase the temperature of the liquid?
It would increase.
What is the policy that deals with a country's economic relations with foreign countries and comprises trade policy and exchange rate policy?
Tariff And Import Quota
How much is 5 yo-ville cash in coins?
On an average the rate of exchange of yocash is 1 yocash = 10000 yocoins but you may increase the rate of exchange to 11k - 13k or more.
What is the connection between an increase in government purchases and the trade deficit?
This is a question of the crowding effect of government spending. When the government increases purchases, it will increase the GDP by a multiplier effect, i.e., the change in GDP is the change in G times 1/(1-MPC). In an IS-LM model, the increased GDP will raise the interest rate and discourage the private investment. Such a "crowding out" effect will reduce the GDP increase. On the other hand, the increased interest rate will raise the international demand for domestic currency and, in turn, increase the exchange rate. A higher exchange rate makes the domestic products more expensive and foreign goods cheaper. Therefore, the export will be lowered while the import will be increased. As a result, the trade deficit will be enlarged.
How does a rise in US interest rates affect the pounds exchange rate?
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
How does the real exchange rate work with standard of living of a country.If the standard of living of a country is more compared with other country how can it be termed interms of real exchange rate?
The real Exchange rate excludes the effects of inflation in the increase in exchange rate so if there is a lot of difference between real and nominal (real << nominal) the standard of living is deteriorating in the country.
