Questions tagged [currency-exchange]
The currency-exchange tag has no usage guidance.
29
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2answers
48 views
Does the exchange rate between 2 currencies NOT account for the cost of living (COL) in their respective countries? [closed]
Alice and Bob both live in a country that has a very low cost of living (like India). They are entry-level software engineers straight out of college.
Alice works remotely for a US company that pays, ...
0
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2answers
73 views
Can an appreciating currency lead to inflation?
If a currency, e.g. the rupee (INR), is appreciating against, say, the USD, it possibly means that there is a high demand for the former. India could have net exports, high remittances, increasing ...
0
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0answers
42 views
Does locking donations on an account for an extended amount of time (50 years) make sense?
Let currency C be a reward proportional to amount of carbon offsets (or any other social good).
I am trying to invent a way to reward (to stimulate social good) holders of this currency.
Let M be &...
1
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2answers
66 views
Is it theoretically possible for a singular national currency to exist under a free banking system?
Free Banking is a proposed monetary system, usually by Austrian Economists, as an alternative to the prevalent Central Banking system. Under this arrangement, commercial banks would issue their own ...
0
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1answer
32 views
Why does Bimetallism require international cooperation to have a chance at succeeding?
I was reading the Britannica encylopedia's article about Bimetallism and under the arguments put forth against it, they cite that bimetallism doesn't work without international cooperation. Could ...
4
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4answers
198 views
Who is losing in an arbitrage?
When some entity takes advantage of an arbitrage opportunity, who is losing money? For example, when there are price differences across cryptocurrency exchanges and someone exploits an arbitrage ...
3
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1answer
37 views
What happened to the Zimbabwe cash dollar after the introduction of Dollarization?
Let's say, before dollarization, I owned 1 million Zimbabwean dollars in cash and the next day dollarization went into effect.
So in dollarization, the current Zimbabwean dollars will be invalid and ...
0
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1answer
30 views
Search terms to find a menu of currency exchange mechanisms?
I'm look to find a good source for comparing mechanism designs for simple currency exchanges.
Is there a name for a category of game (e.g. Stackelberg game) that encapsulates the operation of an ...
0
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1answer
51 views
What does 'currency convertibility' mean?
As a student with almost zero background in economics, I've been struggling to comprehend the notion of the currency convertibility. Most of the definitons I've found online talk about the ease with ...
0
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1answer
86 views
Relation between foreign currency reserve and exchange rate and others
What is the relationship between foreign currency reserve(USD) of a country with it's exchange rate (against USD), and also with export and import strength ?
And if it's too complicated to explain, ...
6
votes
2answers
145 views
Why is the Australian dollar, often viewed by traders as a proxy for the Chinese economy?
The Australian dollar, often viewed by traders as a proxy for the
Chinese economy, gained 0.3 per cent against its US counterpart.
From: S&P 500 hits one-month high on renewed trade hopes (...
0
votes
1answer
39 views
Local vs. foreign currency denomination for Emerging Market Bonds
For emerging market governments, why is it safer to issue bonds in local currencies than in foreign currencies to raise money? Given that both are invested in by foreign investors, couldn't both ...
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0answers
32 views
Effect of interest rates on currencies
I always understood that high interest rates in country A attract investors and cause the currency to appreciate. However, the interest rate parity theory suggests that high interest rates weaken a ...
0
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1answer
19 views
Purchasing power of currency abroad
Say you have two countries A and B. Suppose we have a situation where country A's currency can purchase much more in country B than the other way round. What causes this phenomenen?
Is it possible ...
-1
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2answers
81 views
Are currencies equilibrating?
I was travelling recently and realised that dollars, euros, British pounds and Swiss francs all have more or less the same worth (i.e. 1 dollar $\cong $1 pound $\cong$ 1 euro $\cong $ 1 chf). This was ...
1
vote
1answer
75 views
Currencies fixed to gold
Based on the quoted section & example below:
Why would the Franc or USD fall in price vs the other if they are both fixed to gold; why would having less gold cause paper money to contract?
Why ...
1
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1answer
244 views
Can increase of NEER cause higher inflation?
I´m trying to find siutable econometrics model for explaining inflation during financial crisis and after. My final model shows that if NEERnominal effective exchange rate) increases, the inflation ...
2
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1answer
65 views
Why would a common currency such as the Euro that can't be devalued be incentive for banks to lend money to a country?
I'm reading an article that is claiming that when the Euro was created, banks began lending more money to countries than before because as the Euro is a common currency across many countries one ...
10
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3answers
2k views
How is it possible that all currency exchange rates are fixed w.r.t. to each other?
I wondered if it would be beneficial to exchange a currency through one or more "in-between" currencies.
For example: instead of trading Russian Ruble (RUB) to Euro's (EUR), one would trade from RUB ...
1
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0answers
32 views
Why Yen grew stronger after North Korea's H-bomb threat? [duplicate]
Financial markets have had only a muted reaction to the dispute in
recent months, but on Friday assets regarded as havens for investors
jumped immediately after the news of North Korea’s latest H-...
1
vote
0answers
34 views
What are some benefits of local currencies?
Lets say that we have in my country Greece there is an Island Crete that it has big production (agriculture,small banks etc.) and produces big surplus compared with other parts of Greece and the ...
0
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1answer
47 views
exchange rate and domestic money supply part II
This question is related to the answer to the question
exchange rate and domestic money supply
It is said that the 'CB purchases foreign currency on currency market'.
Is it possible that some of ...
1
vote
1answer
906 views
Exchange rate and domestic money supply
It seems an obvious fact (not explained by authors but stated) that when a Central Bank purchases foreign currency (to stabilise its own), the domestic money supply goes up.
It seems to me that the ...
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1answer
561 views
Balance of Trade - Currency devaluation in a price taker economy
How will a real exchange rate devaluation affect Balance of Trade, if an economy is a price taker in world markets for both export and import?
2
votes
1answer
261 views
what in real terms causes one nations currency to be more valuable than another?
I would like to understand in atomic terms what makes the value of one nation's currency change with regard to another. Read that, without citing complex terminology but in basic terms.
Obviously, ...
1
vote
2answers
3k views
Is there a difference between buying a currency and selling the currency to be converted to?
I'm not an economist. I'm looking to exchange my CAD to EUR. I watched the rates on a exchange office, and I found something strange:
...
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0answers
61 views
What's the equation of currency fluctuation?
Preamble:
Today the rate of EUR is 82.09 in BDT ( Bangladeshi Currency) and two hours later it's 82.50 ( I hope, it's increasing). But why does this fluctuation just keeps happening? Looks like the ...
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votes
1answer
85 views
How do currency traders resolve imbalances in the demand for different currencies?
Countries trade different amounts of goods that are inherently imbalanced. How do currency traders resolve these imbalances in the demand for different currencies? For example....
Imagine we have two ...
4
votes
1answer
347 views
How does Egypt prevent people from arbitraging their currency?
Apparently Egypt uses a fixed exchange rate so there is a substantial difference between the government rate for the Egyptian pound and the price on the street. What prevents someone from just buying ...