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Nations need a system of currency exchange rate in order to be able to tell the value of their currencies. The exchange rate is set again the price of gold in order to have some uniformity across all nations.
Wiki User
∙ 9y ago
Wiki User
∙ 12y agoIf all countries had the same currency, it would promote equal trade.
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What is the need for a system of currency exchange?
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What is the current exchange rate of ther currency to the us?
Incomplete question as you need to specify which currency to get the exchange rate
Why is there a need for currency exchange?
Simply, to gain profit.
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?
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.
Can you exchange sterling in Moscow?
Yes, but you would need to be careful to deal only with banks or major hotels with currency exchange offices. Also, any legitimate currency exchange activities in Russia will require you to produce your passport.
Where can someone exchange Yugoslavia Dinars notes for Indian rupees?
where i need to exchange yugoslavia dinar into indian currency,what is the procedure
Why do you need currency exchange?
Foreign Currency rates fluctuate based on the market forces of demand and supply. This means the rates can change at any given moment. We need a foreign exchange market to determine a value for each foreign currency and this would make it easier to exchange different currencies for one another.
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, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
Why do a nation need forex reserves?
Forex reserve or Foreign exchange reserves are only the foreign currency deposits and bonds held by central banks and monetary authorities. A country needs Foreign exchange reserves as it is important indicator of nation's ability to repay foreign debt and also for currency defense. It is also used to determine credit ratings of nations.
Do you have to exchange currency if you go to Hawaii?
Hawaii is one of the 50 states in the United States of America. United States currency as found on the mainland is the legal tender of Hawaii as well. If you are an American traveling to Hawaii, you therefore do not need to exchange currency.
How do changes in interest rates inflation productivity and income affect exchange rates?
Some countries simply allow the exchange rate to be determined by demand and supply. Some countries attempt to keep the exchange rate between their currency and another currency constant. When countries agree to keep the value of their currencies constant, there is a fixed exchange and is called exchange rate system. Exchange rate or value of a currency is defined by its supply and demand factors. If a country has high interest rate, that will attract more investors to buy that currency to invest (increase in demand for the currency). If inflation is high, the value of the currency decreases over time and therefore not attractive to hold (decrease in demand). If the country has high productivity and does a lot of exports, foreigners will need to buy currency in order buy the goods (increase in demand).
what is trading and what are the types of trading?
Currency trading is buying foreign currency and converting it to your currency. Foreign currency when converted to US currency is worth more than the American dollar. In order to do this you need to know the exchange rates.
