answersLogoWhite

0

A market-determined exchange rate is the value of one currency in relation to another, established through the forces of supply and demand in the foreign exchange market. This system contrasts with fixed or pegged exchange rates, where a currency's value is tied to another currency or a basket of currencies. In a market-determined system, factors such as interest rates, inflation, and economic stability influence currency values, leading to fluctuations based on real-time market conditions. This approach allows for greater flexibility and can reflect changes in economic fundamentals more accurately.

User Avatar

AnswerBot

1w ago

What else can I help you with?

Related Questions

If the supply and demand for currency determines the exchange rates this is called?

floating


What is a currency whose value is determined by the supply and demand for the currency in the market?

Pegged currency ^For me on apex 2022 :)


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.


What are foreign currencies?

Convert one type of currency into another at a given exchange rate. That rate is determined by the supply and demand of the desired currency plus processing fees and/or commissions charged by the retail institution. The market where everyone can exchange currency into another called Forex (foreign exchange) market.


How is the exchange rate determined, which is the value of one nation's currency relative to the currencies of other countries?

The exchange rate is determined by supply and demand in the foreign exchange market, where traders buy and sell currencies. Factors such as interest rates, inflation, and economic stability influence the value of a nation's currency compared to others.


When the exchange rate is stated in terms of dollars per euro, undervaluation of the euro relative to the dollar would mean:O Market exchange rate < PPP based Exchange rateO Market exchange rate > PPP based exchange rate?

erwwreg


How are currency exchange rates are calculated?

Currencies exchange rate are not calculated but determined by the market supply and demand. If the demand is higher than the supply the price will go up and vice versa.


What is the current exchange rate for the stock market?

Current exchange rate for the stock market is different for every country. Encyclopedia should have a lot more information on the exchange rate from countries to countries.


How is exchange rate determined in your country?

God Chooses it


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.


What is Two way exchange quotes?

The buying rate &amp; selling rate in foreign exchange market.


Flexible exchange rates are determined by?

By the demand and supply of currencies in the global exchange market.