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The currrency depreciates maybe because of inflationary pressures which results in high prices for imported goods hence causing a fall in the demand for that currency on the international market.It equally means that now more that country's currency need to be supplied in order to get that other currency.One common example given by Google search engine is that:
Before 1$ Cad=Rs 2
Now 1$=Rs4
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How does any currency appreciate or depreciate?
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
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?
The Yuan is the currency of what country?
China is the country that uses yuan currency.
Trade one country's currency for another country's currency?
command
What is said of a country's currency when it takes more of the currency to buy the same amount of another country's currency?
it has weakened
Does currency appreciate or depreciate if the forward rate increases?
If the forward rate increases, it indicates that the currency will depreciate in the future. This is because a higher forward rate implies that the currency will be worth less in the future compared to the present.
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 will happen to the import if the exchange rate increase?
Usually, the currency will depreciate (lose value).
How does any currency appreciate or depreciate?
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
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 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?
When was Our Currency Our Country created?
Our Currency Our Country was created in 1996.
The Yuan is the currency of what country?
China is the country that uses yuan currency.
Trade one country's currency for another country's currency?
command
What is said of a country's currency when it takes more of currency to buy the same amount of another country's currency?
it has weakened
What is said of a country currency when it takes more of the currency to buy the same amount of another country's currency?
it has weakened
What is said of a country's currency when it takes more of the currency to buy the same amount of another country's currency?
it has weakened
