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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Dollar Cycle & Growth of Developing countries
Several studies have shown that a dollar appreciation cycle is negatively correlated with the real GDP growth rate in emerging economies, while it is positively correlated with a dollar depreciation ...
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Is the concept of "Strong dollar/Weak dollar" a cycle?
I am trying to understand the reasoning of "strong dollar/weak dollar",
Weak Dollar: Leads to increased exports due to cheaper prices for foreign buyers.
Increased exports boost dollar ...
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Is there currency neither undervalued nor overvalued?
Is there currency neither undervalued nor overvalued?
I assume there is such currency in country with fixed exchange-rate regime.
Am I right?
Thanks.
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Why if Saudi Arabia will sell off European debt holdings then euro will be depreciated?
I read news about Saudi Arabia and I have a question.
How to explain that if Saudi Arabia will sell off European debt holdings (+Euro bonds) then euro will be depreciated?
My attempts to explain don't ...
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How to calculate exchange rate (non-PPP rate) if we know purchasing power of two currencies?
Let we know:
old purchasing power in country A (currency A)
old purchasing power in country B (currency B)
old random exchange rate (A/B) (non-PPP rate)
and
new purchasing power in country A (...
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Big Mac Index and PPP on the example with apple price
I calculated Big Mac Index for USD/RUB and obtained that RUB is undervalued approximately 40%.
It is explained by the fact that in Russia we have low labor costs.
I also calculated exchange rate on ...
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Introductory texts about the basics of currencies and finance - ideally various perspectives (not just neoclassical)
I am trying to understand de-dollarisation as someone starting to read up on international relations on my own i.e. I'm not in college anymore and I don't have a background in economics.
The first ...
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How redenomination leads to strengthening of national currency?
I read that redenomination leads to strengthening of national currency but I didn't find more details.
How is it possible?
Thanks.
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Is cause of undervalued currency the low cost of labor force or vice versa?
I read in some source that cause of undervalued currency is low cost of labor force.
In another source I read that low cost of labor force is conclusion of undervalued currency.
What case is true and ...
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Is this logical contradiction in explanation of Big Mac Index calculation or am I wrong?
Let we have currency A and currency B.
In the first country 1A=50B and Big Mac costs 2A. In the second country Big Mac costs 200B.
Old exchange rate: 1A=50B
New exchange rate must be: 200B/2A=100(B/A)....
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Where can I learn about what exactly effects currency values?
So I will admit I am very ignorant of economics, but I am interested in how current events effect currency value.
For example, Saudi Arabia announces it will not renew the petrodollar deal with the US ...
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How is it possible for a country to have both deflation and a weak currency?
As of early 2024, China has lower inflation than America, if not deflation. But the Chinese yuan is also weak right now, requiring Chinese central bank intervention in favor of the yuan to maintain ...
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Academic papers on multi-currency accounting
Hello Economics Stackexchange. I'm currently writing my thesis titled "Multi-currency account management and translation exposure in MNCs: Applications in SAP", which as the title may ...
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What happened to the Sudanese pound in 2023?
Looking at the Sudanese pound to USD exchange rate history,
there is a peculiar trend of devaluation over time. According to Wikipedia:
The Sudanese pound was devalued on 23 February 2021, with the ...
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By how much does debt exceed credit in major currencies?
Fiat currency is created by issuing loans.
Assume 100 crowns (a non-specific currency) existed before the crown became a fiat currency.
Every time a new 100 crown loan is made, 100 crowns of credit ...
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If high interest rates cause strong currencies what do Argentina and Zimbabwe have currency collapse?
These two countries like Argentina have massive interest rate, over 50%, yet nobody can claim the argentinian peso is stronger. In fact its like 1000 to the dollar and was much stronger before. So do ...
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What defines the face value of a new currency?
When a new currency is issued, be it backed or not, its face value, i.e. the value of a single unit of the currency, has to be defined somehow.
For example, when the Euro was introduced in 1999, it ...
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Is Printing Money a Form of Hidden Taxation?
(I'm not a student specializing in Economics or Politics, just an undergraduate in Computer Science, so my understanding of basic economic concepts is limited.
I'd appreciate it if the answer could ...
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What does it mean for a country to use another country's currency?
Argentina's new President-elect is proposing replacing the peso with the US dollar as the country's currency.
What exactly does it mean for country A to adopt country B's currency? And how does it ...
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Why does this example illustrating the effect of growth on exchange rates not work?
I'm looking for a (very) elementary explanation for why economic growth leads to one's currency becoming more valuable. This certainly seems like it should happen (example: "An economy ...
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What downside is there to making the USD the national currency for your country?
I get that for huge countries like China, you can't have the US controlling your currency.
But for some smaller countries, or new fledgling countries, why not have the USD be your national currency? ...
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How often (if ever) do currency exchange cross rates differ from actual rates?
Do major currencies' cross rates ever differ from their actual ('bilateral') exchange rates, and if so, how often does it happen in practice?
I guess it would never happen (beyond, say, the fourth ...
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Did both the U.S. and Zimbabwe economically benefit from dollarization?
Mugabe's leadership of Zimbabwe was harshly criticized by the U.S., citing human right abuses and economic mismanagement. Consequently, the U.S. congress passed the Zimbabwe Democracy and Economic ...
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What is the difference in economy between country that uses national currency only and country that uses not only national currency?
What is the difference in economy between country that uses national currency only and country that uses not only national currency (for example, national currency + dollar)?
Thanks.
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What would be a truly universal currency?
I have no clue where to ask this, so here it goes... With the advent of LK99 and its potential uses in recent solutions for modified Alcubierre drive fields, it pushes me to wonder: What if humanity ...
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When a currency is redenominated, do people with a lot of it lose?
When a currency is redenominated, for example 1,000,000 = 1, which is done in response to hyperinflation due to government abuse of moneyprinting, do the people with a lot of the currency lose?
For ...
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What happens when a country trades with a specific country using that country's currency?
Suppose, a country X trades with another country Y using Y's currency rather than widely ...
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Determine the value of this hypothetical token
Suppose there is a token, an issuer of the token, and a reclaimer of the token. Every year at the beginning of the year the issuer creates and sells at auction 10 tokens. At the end of each year the ...
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Large quantity sale of CNY at current currency value
Some company wants to sell large quantity of CNY and buy USD on Forex. Let current currency value is 1 CNY = 0.14 USD at the time moment on Forex. When company sell large quantity of CNY, money supply ...
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Do borrowing costs go down as a currency depreciates?
I was watching a video (https://youtu.be/2CVOfzuqoY4) and got very confused by the following sentence at 1:18:
"Usually when an established currency depreciates in value, borrowing costs in that ...
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Which foreign currency has had the least amount of inflation over the last 50 years?
I found this table that lists currency exchange rates relative to the US dollar. https://fx.sauder.ubc.ca/etc/USDpages.pdf
I noticed some currencies have increased in value relative to the dollar and ...
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How to prove that an increase in the money supply leads to devaluation of the currency?
In one article I've read that increase in the money supply leads to inflation and exchange rate change.
For example, if we have double increase in the money supply then we'll have double change in ...
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Does the US record tax receipts as cash on its balance sheet?
The currency in my wallet has the words “federal reserve note” on it. To me that implies that what I call money is actually a liability of the government. So when I pay taxes, isn’t that act actually ...
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Do an increase in foreign investment increase the value of domestic currency?
I'm now studying about international trade and policy. I've known that higher interest rate would attract foreign investment therefore the demand for domestic's currency gone up and increase the value ...
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How would a Central Bank Digital Currency be different from a private bank deposit?
Both are digital, both can be transferred digital, and both are denominated in the same currency. A CBDC is "a direct liability of the central bank, rather than of private banks or coin issuers&...
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Why was the massive outflow of silver before the first Opium War so bad for the British Empire?
TLDR
I am a person without any significant knowledge of economics, so even though I have (I suspect) some partial answers, I need a better understanding of these.
Background and question
In accounts ...
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Visualizing the "Impossible Trinity"
I would like to create a data viz to show, in one chart, where some of the major economies are on the trilemma. It won't be perfect, but I'm just looking for a rough characterization. For my data viz ...
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Distinction between world reserve currency and world reserve asset
The two sound very similar, almost identical:
The dollar as a world reserve currency
The dollar as a world reserve asset
But I'd venture there are important distinctions. As an asset, the dollar is ...
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Was the council bill system used in British India a wealth extraction mechanism?
Jason Hickel says that the council bill system used to pay exporters of Indian goods during the British Raj was a mechanism by which Britain extracted wealth from India without giving India anything ...
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What factors influence the price of a good?
I assume this is a really basic question but when people start using a currency the value of which isn’t pegged to any specific substance such as gold, how does that currency evolve to correlate with ...
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Covered interest rate parity: the forward contract is not risk free
Covered interest rate parity (CIRP or CIP) can be formulated as:
$$
(1+r_{f,Home})=\frac{S_0}{F_{0\rightarrow 1}} (1+r_{f,Foreign})
$$
where $r_f$ are risk-free rates in the home and foreign countries,...
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Is there any need of digital currency given online payments through bank balance
Given talk about launch of retail digital rupee by RBI in India, is there any need for digital currency given online payments through bank balances of individuals/firms already serve the purpose?
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What happens to the currency of a war winner?
Are there examples in history that teach what happens to the currency of a war winner? Is any of this knowledge transferrable to the current situation, with either Ukraine or Russia winning the war?
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Central bank balance sheets and money supply balances
I've compared the central bank balance sheets of many countries and I've found some numbers strange for me. The balance sheet of a central bank should include all the assets on one side and all the ...
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If the value of the currency of an economy rises, then is it less desirable to trade with that economy?
I recently heard on a video that when the value of the currency of an economy rises, it is less desirable to trade with that economy. I couldn't understand it.
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How Demand of a product affects the currency
Question : Iron ore is Australia's largest export. Suppose that there was an unexpected increase in demand for Australia's iron ore exports globally. Explain what this would do to Australian Dollar ...
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How to determine exchange rate for a new currency
I have always read in present time currency exchange rate works on demand and supply
But imagine tomorrow a brand new nation with brand new currency is born
All its people are farmers and land is not ...
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What are the consequences of a single global currency on trade?
Sorry for the general nature of the question but I find it difficult to wrap my head around the idea of a global currency.
Let's say there existed a single global currency which was not controlled by ...
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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
&...
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