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.

Filter by
Sorted by
Tagged with
1
vote
3answers
463 views

Questions on comparing GDP between various countries

What is the difference between OER vs PPP? What fundamentally drives them? Shouldnt an arb opportunity exist and wouldnt that difference then go away? My understanding of OER is the official nominal ...
3
votes
1answer
130 views

Does a strong dollar achieve the same tightening effect on the economy as rising interest rates?

Rising interest rates means the cost of borrowing USD goes up. A stronger USD means USD becomes more expensive. Wouldn't that naturally follows that the cost of borrowing USD goes up since each dollar ...
8
votes
2answers
2k views

What would happen if the world switched to a single currency?

What would happen if all countries suddenly stopped using local currencies and adopted a global currency (like the Euro, but for everyone)?
1
vote
0answers
58 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 ...
0
votes
1answer
43 views

Do the stock performances of various companies have a measurable correlation with exchange rate?

For example if the values of big companies in a country decrease, will the value of that country's currency measurably decrease?
-3
votes
1answer
83 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 ...
1
vote
0answers
75 views

How does foreign exchange settlement work?

How does the settlement of trades in foreign exchange work? For example, if I am a large company with money in dollars and I buy another currency like Deutschmarks with my dollars, how does the money ...
1
vote
1answer
394 views

What effect would destroying large amounts of physical currency have on government finances

India has recently recalled high denomination notes and asked people to deposit the physical currency in old notes in their bank accounts. People who have unaccounted wealth are resorting to ...
1
vote
0answers
72 views

How is the banknote denomination designed?

Recently India demonetized their 500 and 1000 rupee notes. As a replacement a new 2000 rupee note was introduced. This has resulted in some chaos in the commercial markets due to decreased ...
0
votes
1answer
24 views

How will the value of the pound affect the British economy?

Given the recent massive decrease in the value of the pound, does this not equally devalue the British economy by a similar amount? Why does that not lead to an immediate large crash in Britain as ...
1
vote
1answer
130 views

Why switch from Gold to Fiat

If I'm not mistaken, gold was used in early days of USA. Why did we switch to fiat, i.e dollar bills. Originally they were backed by gold, so why not keep gold? I'm just trying to understand basics ...
0
votes
1answer
113 views

What is a bilateral currency swap line? [closed]

Please explain in simple terms. How exactly does it function?
2
votes
3answers
576 views

Is there a good way of assessing an estimated absolute value of a currency?

If we want to figure out the strength of a currency relative to another currency, we look at the exchange rate between the two. However, I'm wondering what is the most accurate way of assessing the ...
7
votes
1answer
486 views

How can the Swiss exchange rate be very biased in a free market?

In 2002, when Germany, France, Italy and Austria adopted the Euro currency, the exchange rate with Switzerland was 1.60 CHF (Swiss Franc) = 1€ (Euro). The prices and salaries in Switzerland were ...
3
votes
2answers
168 views

The Currency Value

On what basis, The value of any currency changes: Does it depend on re-paying the loans. Or it depends on trade & exporting. (e.g. The "Dollar" equals 13 Egyptian pounds... What's the reason? Is ...
2
votes
1answer
356 views

What is the difference between currency manipulation, and a fixed exchange rate regime?

China is labelled by some to be a 'currency manipulator', that is supposedly pegged to the US Dollar. What is the difference between currency manipulation and a fixed regime? Different motives? I ...
4
votes
2answers
496 views

because bitcoins do not generate earnings, then (it is a ponzi scheme)?

What does the author mean with: Since Bitcoins do not generate any actual earnings, they must appreciate in value to ensure that people are willing to hold them. Why must they appreciate in ...
1
vote
1answer
35 views

In a trade imbalance does the importing country's currency become more valuable?

Suppose that country A buys freely from country B, but B uses steep tarriffs to block its citizens from buying from A. In that case country A's currency will pile up in B. Other things being equal, ...
8
votes
5answers
543 views

Why do currencies cover orders of magnitude?

Using 1 USD as a reference, most currencies are within an order of 5 away from the USD: that is, one unit of most currencies is worth between 0.2 USD and 5 USD. (Source.) In fact, most European ...
1
vote
2answers
899 views

How will the Brexit affect the Euro and the Pound?

The question is the title: How will the brexit affect the euro and the pound? It looks like GBP is facing a tough situation. It is at its lowest value since 1985. Has GBP dropped permanently(or for a ...
-1
votes
1answer
5k views

What is the list of countries where the central bank prints money?

Is there a list of the countries where the central bank is creating money, today ? How much ? We know for: EUR: Euro countries (since ECB QEs) (and euro-bound countries as DKK ?) YEN: Japan (BOJ '...
6
votes
2answers
686 views

Why could interest rates go up if Brexit happens?

I was reading this article, George Osborne says Brexit would drive up mortgage rates: George Osborne has issued a stark warning that mortgage rates will rise if Britain leaves the European Union. ...
1
vote
0answers
23 views

How is the choice of banknote denominations made?

I'm not sure which SE network this question belongs to, but this seems to be the most appropriate one. What determines the choice of banknote denominations? Obviously, the first factor is the ...
3
votes
2answers
185 views

Currency Values, Developing Economies and Balance of Trade

For a developing economy like India, where balance of trade is negative, is it good to have a weak dollar or a strong dollar? Dollar value increases (Rupee, the local currency, weakens), imports (...
3
votes
1answer
512 views

Who gets newly printed currency?

The central bank of a country is responsible of the printing of new currency notes and coins/ money to the economy of a country. My question is how they introduce this new money into the economy in a '...
5
votes
1answer
547 views

Why is deflation not considered the opposite of inflation?

In this article from 2013 on bitcoin, the author casually states the importance of knowing that "deflation is not the opposite of inflation", without expanding or elaborating. I'm sure that there are ...
3
votes
3answers
536 views

Market Behavior under expected and unexpected news

I found the following text in the paper "Real-time Price Discovery in Foreign Exchange" The general pattern is one of very quick exchange rate conditional mean adjustment, characterized by a jump ...
1
vote
1answer
52 views

Which currency is preferred when countries with different currencies purchase imports/sell exports?

For example, when a company in the United States sells goods to a company or distributor in China, does the U.S. company accept payment in yuan (which it then exchanges for dollars on the currency ...
2
votes
4answers
142 views

In this scenario, which coin is more valuable?

There are two coins, Coin A and Coin B. You can transfer Coin A for Coin B or Coin B for Coin A only in the two following ways: Give 100 Coin A for 10 Coin B Or Give 10 Coin B for 50 Coin A In ...
0
votes
2answers
52 views

Can a currency with constraints on the amount a person can posses boost the economy?

So there was the following proposition: Create a currency with the following contraints: Each person may only own x amount of this currency. Gaining more of this currency is not allowed. Using a ...
1
vote
1answer
1k views

Federal Reserve Notes vs Coins

More of a two part question. In the current system (Fiat only currency), why is a Federal Reserve Note booked as a liability (on the Fed balance sheet), but a Coin is not booked as a liability by the ...
0
votes
0answers
18 views

How does the euro swap for Greek debt work?

As I understand it, some portion of the Greek sovereign debt has been converted into "Euro swaps". Can someone explain in simple terms what that means? What debt was given to whom?
2
votes
1answer
65 views

Comparing currency prices

If I know that one USD buys 0.90 euros or 1.42 Australian dollars, can I reliably conclude that one Australian dollar buys 0.63 euros? (0.90 / 1.42) That seems to make sense. But would this be true ...
0
votes
1answer
106 views

Smart contracts in Dollars

In last years I have read a lot about "Smart contracts". But I cannot understand why we need bitcoin for this? The old-fashioned US Dollar are not used in Smart Contracts?
0
votes
1answer
52 views

How to make deliberate devaluation or depreciation of a currency?

It is said in Wikipedia, that devaluation can be done as monetary policy act. But HOW this can be done if there is no fixed rate? What are actual tools Central Bank can use? One thing I can imagine ...
1
vote
2answers
112 views

What is preventing the United States from printing USD to buy up prized assets from foreign countries given that USD is the world's reserve currency?

USD is accepted all over the world. U.S can easily print USD to buy up the most valuable assets from all over the world. Ethics aside. What is preventing the U.S from doing so? What did I miss out?
1
vote
0answers
54 views

A country with dual payment system

Is there any country with dual domestic payment system? For instance, in the USA there are CHIPS or Fedwire both help wire transfer of USD within the USA. They give services to international ...
1
vote
1answer
90 views

Will Chinese yuan be a key international currency someday?

IMF adopted Chinese yuan as international currency the other day. Will Chinese yuan be a key international currency someday?
1
vote
2answers
123 views

Why is devaluing your currency good for exports?

I have the typical answer: "A cheaper currency means exports will go up because it's cheaper to buy from us!" Yeah, sure, but that's obviously full of holes. Let's have a simple situation: We have ...
5
votes
1answer
193 views

Book for Bretton Woods conferences and gold standard

I am looking for a good book to explain to me why the gold standard existed and why in the Bretton Woods conferences, some countries choose to abandon it. An explanation of the general scenario in a ...
6
votes
3answers
244 views

Fractional reserve banking and the value of someone else's currency

Suppose there are two countries: $A$ and $B$. $A$ is a large, stable, democratic country with its own currency, the dollar. $B$ does not have its own currency. All prices and financial transactions in ...
3
votes
3answers
188 views

Is it necessary to have currency in an ideal centrally-planned economy?

Under this condition, the price of goods are definitely meaningless.
5
votes
1answer
244 views

The Insane Sultan of Slickcrudistan: Calculating Currency Equilibrium

I work for a start-up that has encountered an economics problem no one on our team has been able to crack. A story form and a general form of the problem are below. I believe they are equivalent, but ...
1
vote
0answers
63 views

Isn't the concept of “Currency Manipulation” really much ado about nothing? [closed]

(edit this bracket out: i'm sorry for being unclear in my question, it was too mild or undirected earlier, i hope the following is better; thanks) You keep hearing politicians and sometimes the biz ...
1
vote
1answer
7k views

How does an import quota affect the demand / supply of currency?

An import quota in an open economy might not have the desired affect of increasing the GDP as it increases the demand of domestic currency in the open market raising exchange rate. How does it happen ...
2
votes
2answers
1k views

Exporting inflation

One explanation I have read for the resistance of the dollar to inflation is that it is "exported" meaning that excess dollars go abroad and foreign use of the dollar increases, thus preventing the ...
5
votes
1answer
909 views

Why does the Dutch disease cause the value of the currency to increase?

I was just reading about the Dutch Disease and it causes that the value of a country's currency increases when said country suddenly finds natural sources of oil. Why is that?
4
votes
1answer
11k views

Why did US dollar appreciate during the Global Economic Crisis (2007-09)

We know that the US dollar exchange rate increased during the global recession while usually when an economy performs weakly its currency should depreciate. How was there still a huge demand for USD ...
4
votes
2answers
251 views

Why are they raising interest rates in Brazil?

How does raising interest rates in Brazil (and Russia) help fight inflation and defend their currency? I understand that the basic model is that raising the rates is meant to encourage banks to lend ...
2
votes
1answer
39 views

why the currency crisis must occur at time t0 when the pegged rate equals the shadow exchange rate [closed]

Explain why the currency crisis must occur at time t0 when the pegged rate equals the shadow exchange rate and not before or after t0. Suppose the crisis were to occur at a date before and after t0 ...