Questions tagged [currency]

a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.

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4 answers
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Can someone explain why sterling-dollar parity is bad?

Please forgive the probable naivety of this question. I am not an economics student I am just trying to understand the currency fluctuations that are currently occurring with GBP as a result of our ...
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Options, Futures and other derivatives, book by Hull, confusion of currencies

I have a small technical problem with a book by Hull: on the page 7, the first line, in the 11th edition of his book Options, Futures and Other Derivatives (please see the snippet below) he writes &...
0 votes
2 answers
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How did the first money owners get their money?

If certain people were the first money owners, then how did they get their money? How could someone have paid the first money owners with money, if nobody before the first money owners had any money?
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What does THO, as in "USD THO", stand for in export statistics?

I've noticed that some online sources use "USD THO" as a unit to express rates of transfer of value. Specifically, I saw it in measuring Chinese exports to Russia in this video at 21:20 ...
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1 vote
2 answers
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What is meant by "faith" in the context of fiat currency?

I am reading a book on how money works and it has the following definition for fiat currency: "currency with value backed by faith in the government and economy." What does that mean exactly?...
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How is a central bank able to control currency supply in an economy which has other banks and non-physical currency?

As I understand, in most economies, the central bank is supposed to be in charge of monetary policy, which in part means that they are supposed to be the only authority which can increase the amount ...
3 votes
2 answers
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Will the value of ruble decrease in the long term if the sanctions against Russia are not lifted?

For simplicity, let's take the example of the USD-to-RUB rate. Currently, Russia manages to maintain it at around 60 RUB per USD. However, as far as I understand it, they manage to do it by selling ...
5 votes
1 answer
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How can the exchange rate be virtually constant with major inflation rate difference and a widening trade deficit?

I have recently had a discussion with a colleague about what seems to be a rather strange macroeconomic aspect in Romania (which has RON currency): EUR-RON exchange rate has been virtually a flat ...
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Perception of value between different currencies

So let's say I am going to sell a game and I'm trying to come up with a fair price. The thing is, I am from Brazil and I'm selling in an online platform where most products are priced in dollars. The ...
1 vote
2 answers
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Mechanisms to discover unbacked creation of foreign currency

Suppose there's a country called Crook Islands. The president is John Crook, one of his sons owns a bank called Crook Island Bank domicilated on Crook Islands, and the other son is the Minister of ...
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1 answer
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Why does the dollar seem weak?

2:00 (GMT+8) - The FED raised interest rates at 0.75-percentage-point (75 basis points I believe, not sure with terminology but definitely now at 1.75%). But even so, why does the USD seem weaker? I ...
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Emerging Market Currencies vs. Developed Currencies during Business Cycle

Emerging market currencies usually outperform developed currencies (USD, Euro, etc.) during the late stage of the business cycle (falling growth, rising inflation) because they are much more ...
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1 answer
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Mistake in Wikipedia article on Fixed exchange rate system?

I think there is a mistake in the following Wikipedia-article: https://en.wikipedia.org/wiki/Fixed_exchange_rate_system at figure 2 and 3. I think the ECB has to BUY (not sell) the dollars as in point ...
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1 answer
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Why does a stronger US dollar translate to potentially lower sales and earning for Microsoft?

A recent headline stated: "Microsoft Corp. cut sales and earnings guidance for the fourth quarter, citing unfavorable foreign exchange rates as the stronger U.S. dollar takes a toll." ...
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0 answers
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Which is most accepted - USD100 or USD 100?

With or without space after currency code? I'm seeing different versions. Here it says USD 100 but here is USD100. Which is the most accepted term?
2 votes
1 answer
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Currency vs purchasing power?

When I search the internet about which is the strongest currency, the answer is the currency which buys more from other currencies. For example if 1 euro can buy 10 dollars then euro is a stronger ...
2 votes
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Why has the Yen weakened despite lower inflation?

I have recently wondered about the depreciation of the Japanese Yen against the USD (or any other major currency). Currently, a thousand Yen is at around USD 7,75. This is about about a twenty-year ...
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1 answer
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How to reconcile 1) the International Fisher Effect and 2) rising interest rates leading to currency appreciation?

The International Fisher Effect implies that a currency with a lower nominal interest rate will appreciate against another currency with a higher nominal interest rate. However, in general, a currency ...
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2 answers
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Why did the Iranian Rial peak suddenly on 1 August 2014?

Search Iranian Rial and click on Max above the chart. Iranian Rial to Pound Sterling: Why did the Iranian Rial peak suddenly on 1 August 2014?
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3 answers
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Did Russia peg Rubles to a Gold Standard?

Did Russia peg the Rubles to gold? I keep reading articles on that. Are there any catches or circumstantial facts, that Russia is not on a gold based standard? Trying to verify these articles. ...
5 votes
1 answer
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What are the reasons for Russian Ruble to strengthen in the past few days?

1 USD was about 75 Russian Rubles before the war in Ukraine began. After the sanctions, Russian Ruble quickly declined and 1 USD skyrocketed to 139 Rubles. Now it is back to around 85. What are the ...
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Countries whose currencies have changed

Countries whose currencies have changed Can you highlight the main reasons as why some countries have changed their currencies ? What will be the impact on their economy once they change their ...
2 votes
1 answer
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What is the name of this economics tale about the role of money?

I recall this simple tale that summarizes the role of money in economy. I am looking for the original reference to its text, author and initial date of publication. A foreign merchant reaches a ...
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1 answer
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Why doesn't Ukrainian currency suffer from the war?

The value of the Hryvnia, has hardly been affected by the Russian invasion of Ukraine on 21 february. https://www.google.com/search?channel=fs&client=ubuntu&q=hryvnia+to+euro I can think of ...
1 vote
1 answer
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Determining a better model for for a new currency

I am in no way an economist (Just a computer programmer) and want to learn if we can use the gold standard (With improvements for using it in the Crypto domain) For example; If we have a physical ...
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1 answer
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On what basis do countries repay international loans?

Most countries have their own sovereign currency. Essentially they can print their currency. So how do countries repay their loans? And a similar question would arise while granting a loan to another ...
3 votes
2 answers
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What does a currency say about an economy and how to compare them?

I have a pretty basic question about comparing currencies. But I just need to have this cleared up because I can't wrap my head around it. When I want to know for example which currency is stronger, ...
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What is fiat currency and what are its ledgers?

How are these ledgers maintained and who does it? A practical example would be very helpful. Thank You Edit: I was learning about the history of money and ledgers. Because Bitcoin is a ledger in the ...
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1 answer
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Should governments print money while the currency gets stronger

In a given situation where a local currency becomes very strong compared to other major currencies (like the USD, EUR, etc...), should the government / central bank leverage the opportunity to print ...
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Is the value of crypo currencies determined against the US dollar?

For example, for a european investor is EUR/Bitcoin implied directly from of USD/Bitcoin or are traded as 2 different markets?
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1 answer
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How does Distributed Ledger Technology-based Central Bank Digital Currency provide efficiency gains and serve as a contingency payment medium?

From reading Lannquist,2020, p.7, they said DLT-based CBDC "could offer diversification in payment “rails”, providing efficiency gains or serving as a contingency payment medium." I am ...
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What does "hybird CBDC" mean?

I am reading literature relating to Central Bank Digital Currency)CBDC), I faced a termed called "Hybrid CBDC" from Lannquist,2020, p.7 I am looking for the meaning of this word but still ...
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2 answers
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Do exchange rate indicate richness/poorness of a country

Suppose there are two countries, A and B and if 1 unit of currency of A = x units of currency of B And x>1 does that mean that country A is richer or people are well off there?
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2 answers
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Create currency with truly fixed exchange rate

Currency fluctuates depending on supply and demand In fixed exchange rate, any central banks could ties their currency to another country's currency or Gold price. Which, basically, still fluctuates ...
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1 vote
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How do non-US governments raise dollars?

I want to understand how non-US governments earn dollars. I tried googling for it but there seems to be no information on the internet. Your help is much appreciated. I am looking for methods that don'...
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4 votes
2 answers
550 views

What is the difference between money and currency?

Is money an intangible concept and currency a way to make it physically present? If not, then what is the difference?? Please dont duplicate it as i have read other answers and then asking.
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4 answers
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Are there any benefits of moderate devaluation of a currency?

The value of Indian rupee has decreased over the years. The government apparently makes no effort to stop or reverse it. Instead they focus on other aspects of development. Observation 1- I see that ...
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2 votes
1 answer
40 views

Impact of new IMF SDR allocations on currencies

I understand that IMF is currently contemplating printing money via new allocation of SDR, and thereby attempting to help increase global liquidity in period after covid. What impact, if any, can ...
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1 vote
1 answer
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Inflation rate of a country vs. currency

The way I understand, inflation rate is the change of Consumer Price Index per given period of time. Is this correct? What's the different between inflation rate of the economy of a country vs. ...
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0 answers
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How was sulphuric acid used to back money?

I remember reading in a economics and history book that sulphuric acid production was used as an alternative to gold standard as the basis of the value of currency due to it’s importance in making ...
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1 answer
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Are there any notable exceptions to the Impossible Trinity theory?

I am referring to the theory presented on Wikipedia and The Economist that states: The impossible trinity (also known as the trilemma) is a concept in international economics which states that it is ...
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1 answer
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Does it make sense to talk about Bitcoin 'inflation' when little to no goods and services are listed in Bitcoin currency?

I think of inflation as a generalized increase in the price levels of a basket of goods and services. I should add that my understanding presumes that inflation should be measured in the same currency ...
1 vote
1 answer
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Why GDP is converted to 2010 $US constant in international studies?

GDP is a widely-used macro control variable in finance-related papers, especially for international studies. I am wondering what is the reason why GDP is converted to $US 2010 as noted by WorldBank. ...
4 votes
2 answers
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Is modern monetary theory sustainable?

I am looking around at a lot of the central banks around the world (primarily ECB, Fed, and BOJ) and they all seem to be simply printing their way out of any issues with their economies. As far as I ...
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1 answer
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Why the stock market went up when the currency being weakened?

From Bloomberg Market Concept (BMC), in 2013, Japan is traditionally a heavy exporter, especially automobiles. When the yen being weakened, the Japanese automobile being more attractive because it ...
1 vote
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Does a high current account deficit devalue the national currency?

I've been reading some materials about Belarus's 2011 financial crisis, and a common thread among them is this: Belarus had had a rapidly growing current account deficit, and in 2011 it came to a head ...
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Comparing Real GDP with different base years and currencies

I have a quarterly panel data of several countries. I have taken the data from Fred. Some countries' real gdp is in chained 2010 prices and some in other years (such as 2015 and 2018). How can I make ...
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1 answer
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How does one country peg its currency to another's? [closed]

For example, Belize has pegged its currency to the US dollar at an exchange rate of 2 Belize dollars to 1 US dollar. How does Belize do that?
1 vote
1 answer
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Why isn't high inflation along with robust welfare a 'good' system?

High inflation, by definition, means that the demand for goods and services is higher compared to the demand for currency. In other words, people are more willing to give up currency for goods and ...
11 votes
4 answers
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Are financial markets "unique" for each "currency pair", or are they simply "translated"?

This is something I've been long wondering about. Let's say that I have statistics showing the daily closing Bitcoin price in USD since early 2009. Great. Now, if I wanted to get the daily closing ...
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