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The supply of foreign exchange of a given country stems from the sale of foreign merchandise, services, and capital to that country. When foreigners want to buy a country's exports, they must purchase it currency with their own. Thus the supply of one country's currency available to a second country is closely related to the demand for the second country's currency. When the demand schedule of a given country for a foreign currency is known, the supply schedule of the foreign country's exchange can be frequently derived from it.
BY TAVINDER SINGH
CAREER BUILDER
C-1503 INDIRA NAGAR,LUCKNOW
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What determines supply and demand in the foreign-exchange market?
Supply and demand in the foreign-exchange market are determined by changes in many market variables, including relative price levels, real interest rates, productivity, product preferences, and perceptions of economic stability.
Why does the supply curve in the foreign-currency exchange market become vertical in an open economy?
In an open economy, the supply curve in the foreign-currency exchange market becomes vertical because the central bank can adjust the supply of its currency to meet the demand, ensuring stability in the exchange rate.
What are the sources of the supply?
1. Bank Credit to Government 2 Advances to Private Commercial Sector3.Foreign exchange assets (net) of Banking Sectorless Non-monetary liabilities.
What are the sources of money supply?
1. Bank Credit to Government 2 Advances to Private Commercial Sector3.Foreign exchange assets (net) of Banking Sectorless Non-monetary liabilities.
Who or what determines the exchange rates in the foreign currency market?
Currently exchange rates are determined by laws of supply and demand.
What determines supply and demand in the foreign-exchange market?
Supply and demand in the foreign-exchange market are determined by changes in many market variables, including relative price levels, real interest rates, productivity, product preferences, and perceptions of economic stability.
How the foreign exchange rate is calculated?
the foreign exchange rate is determined by the supply and demand of the market. If the demand of a certain currency pair is greater than the supply the price will rise and vice versa.
Why does the supply curve in the foreign-currency exchange market become vertical in an open economy?
In an open economy, the supply curve in the foreign-currency exchange market becomes vertical because the central bank can adjust the supply of its currency to meet the demand, ensuring stability in the exchange rate.
What are the sources of the supply?
1. Bank Credit to Government 2 Advances to Private Commercial Sector3.Foreign exchange assets (net) of Banking Sectorless Non-monetary liabilities.
What are the sources of money supply?
1. Bank Credit to Government 2 Advances to Private Commercial Sector3.Foreign exchange assets (net) of Banking Sectorless Non-monetary liabilities.
Who or what determines the exchange rates in the foreign currency market?
Currently exchange rates are determined by laws of supply and demand.
What has the author Mustapha Rouis written?
Mustapha Rouis has written: 'The supply response to exchange rate reform in Sub-Saharan Africa' -- subject(s): Foreign exchange administration, Foreign exchange rates
When supply and demand analysis is used to study the exchange rate foreign exchange is treated just like?
a good or a service
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
Which foreign exchange system has the highest foreign exchange rate?
The Zimbabwean has the highest foreign exchange rate.
What do you mean by foreign exchange?
Foreign Exchange is Exchange between two currency.
What are foreign exchange rates?
Foreign exchange rates are currency exchange value of other countries.
