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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1answer
51 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 ...
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2answers
106 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?
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1answer
720 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 ...
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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 ...
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2answers
95 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 ...
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1answer
184 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 ...
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2answers
3k views

How do excessive foreign reserves cause inflation?

I have studied that accumulation of foreign reserve has the potential to raise inflation levels in economy as the money base increases (= domestic currency + foreign reserve increases) and if it ...
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3answers
170 views

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

Under this condition, the price of goods are definitely meaningless.
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1answer
88 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?
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3answers
1k views

Why does a stronger currency have a tightening effect on economic conditions?

http://www.economist.com/blogs/buttonwood/2015/12/central-bank-predictability Ever since 1987, banks have been willing to cut rates when markets have wobbled. Driving down bond yields has been an ...
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1answer
6k 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 ...
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3answers
751 views

What does a central bank guarantee against its currency?

During the Bretton Woods system, currencies were issued against gold. In contemporary times, what is the real thing against which currency is issued? What does the fiat currency actually guarantee?
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898 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?
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1answer
10k 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 ...
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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 ...
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2answers
238 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 ...
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2answers
890 views

Can small countries use a foreign currency as their official currency?

Having one of the "big currencies" (US-Dollar, Euro, Japanese Yen) is of several advantages: Tourism: There is a huge amount of people who can directly use it (317*10^6 US citizens, 337*10^6 people ...
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1answer
229 views

What would happen in Venezuela if the currency exchange control is removed overnight?

What would happen in Venezuela if the government all of a sudden starts offering currency exchange by the prices of the free market? To my knowledge, the main reason for the government in Venezuela ...
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0answers
71 views

What is the impact of a technology to produce gold at low cost?

Let's say in a few decades we can find a new technology to produce gold at low cost which will cause the price of gold to be as low as other metals. My question is that how would this have an impact ...
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2answers
766 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 ...
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2answers
190 views

Why are European countries happy to be outside Eurozone?

In EU countries like Poland, Czech Republic, Hungary, etc, people are happy that they are not in Euro zone and Euro crises like that of Greece do not affect their economics. However, some European ...
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What is the chain of events that occur when oil price drops that makes the Canadian dollar lose value? [duplicate]

A large part of why the CAD has been weakening (against the USD) is because the value is crude oil has been falling, and Canada is a big exporter of oil. But this oil doesn't belong to Canada. It ...
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1answer
837 views

Series 2013 US dollar bills [closed]

it's 2015 now but still, I can't find any USD bills of 2013 series. All my bills are 2009 series (not even 2009A series). I'm looking for 100 dollar denomination. what's the latest series for USD ...
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1answer
100 views

What does “the world's strongest currency” title mean for investors? [closed]

Kuwaiti Dinar shows up as the most expensive in the world. Does that mean I better invest in KWD (or the safe USD) instead of my home currency (IDR)? A little background: I am just an ordinary person ...
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Why does a currency devaluation make a country more attractive for foreign direct investment?

The author of this article says "[the devaluation of the yuan] may also have impact on [foreign direct investment (FDI)] if China becomes a more attractive destination vis-a-vis India". Why is this? ...
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56 views

Foreign Currencies Exchange Data [closed]

I need data for forex rates because I'm working on a project to predict the rise and fall of the rates. Where can I find such data?
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7answers
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How interest rate affects currency

I am quite new to economics. I was reading about changes in interest rates and its effect on currency value. The fact is as interest rates increases, the currency value also increases and vice versa....
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4answers
764 views

I lost $100 in the laundry, who won?

I lost a 100 dollars bill in the laundry (it was destroyed). I clearly lost 100 dollars. Where are they now? Who won 100 dollars?
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8answers
5k views

What would be the effects of an expiration date on currency?

Let's say we introduce a monetary system where each piece of money is printed with an expiration date - a year, perhaps. I'm imagining something rather different from inflation (although I do not ...
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0answers
92 views

Why 1000 Rs and 500 Rs not accepted in Bhutan and Nepal? [closed]

In Nepal and Bhutan, Indian rupee is accepted but 500 Rs. And 1000 Rs note is not accepted. Cam there be any specific reason behind this?
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Baht drops and Gas Prices too? [closed]

Why would the powers to be drop the price of petro while their currency's value declines? The Thai Baht has been dropping significantly in value the past few weeks at the same time the price per ...
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4answers
15k views

How does a country devalue its currency?

I recently read an article in the New York Times that talked about China devaluing its currency (which I believe is held to a peg against the US Dollar). My question is: specifically what tools does a ...
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1answer
565 views

Why would a government allow currency speculation?

I would like to know the reasons for any government to allow currency speculation. What is the benefit for a country and for it's people if the currency speculation is allowed? My cousin's farm is ...
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3answers
2k views

What are the differences between the older gold standard and the current fiat money standard?

My current limited understanding is that the gold standard was a system in which there was a fixed currency amount per unit of gold. For example, 1 ounce of gold might be 100 USD. Another country like ...
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Why is Indian rupee is stable against the USD even though most other currencies weakening?

The Indian Rupee (INR) seems fairly stable against the USD (1 USD = 62-64 INR) in the recent times even though most other currencies have weakened against USD, some by 20-30%. Apparently, INR is ...
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2answers
995 views

Floating exchange rate and cost-push inflation?

I have a trouble understanding the following text from my textbook. I bolded the fragments that don't make sense to me. "Disadvantages of a floating exchange rate: A floating exchange rate regime may ...
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2answers
365 views

Does Dogecoin or Bitcoin have a more appropriate rate of monetary inflation?

The supply of new Bitcoins and Dogecoins is depicted in the graph below. The Bitcoin inflation rate is currently higher than the Dogecoin rate, but it reduces sharply to a rate close to zero. It ...
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1answer
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How would Greece “temporarily” leave the Eurozone?

Amongst the negotiations between the Greece and the Eurozone leaders, there currently exists the possibility that Greece will leave the Eurozone for five years. Does this imply Greece would have to ...
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Currency conversion and Purchase Power Data

Where can I find multipliers to convert a certain amount in a currency, say USD of 1960 to say present EUR taking account of purchase power parity ?
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1answer
205 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, ...
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3answers
983 views

Why is the Euro a bad idea compared to other currencies?

Many economists, including Nobel laureates Paul Krugman and Joseph Stiglitz, have said that the Euro was a bad idea from the beginning and is a major reason for all the current economic problems. My ...
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1answer
134 views

Currency substitution after withdrawal from a currency union?

Currency substitution is the situation where a country uses a foreign currency. For example, Montenegro and Kosovo unilaterally use the euro, El Salvador and Panama unilaterally use the dollar. In ...
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2answers
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Can banks maintain Euro accounts if the country they're in leaves the eurozone?

If a country forcibly leaves the Eurozone, is it possible for banks within this country to maintain existing euro deposits? Or does leaving the eurozone mean those deposits are automatically ...
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5answers
419 views

Why should Greece destroy their cash euros?

Leading economists in my country (Sweden) recommend and predict that (in the case of default) the Greek government will destroy all the euro bills in the country. Making holes in them and stamp them ...
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1answer
484 views

How does US (its economy, banks, industry) profit from dollar being the “standard currency”?

How does US (its economy, banks, industry, "finance industry") profit from dollar being the "standard currency"? I am not seeking "ideological" explanations, but explanations of the mechanisms ...
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3answers
219 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 ...
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1answer
158 views

How does a bank convert one currency to another?

Say for example I sell ZAR and buy USD. What happens behind the scenes so that the local ZAR bank is able to deposit USD into my account? Does the bank require some sort of USD cash reserve? How do ...
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1answer
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Questions regarding foreign exchange online trading

I am currently studying economics in college and taking course Macroeconomics and International Finance which covers foreign exchange market topic. The class is very crowded since there are more than ...
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Calculating nominal GDP

I would like to understand one detail of how nominal GDP of a country in a given year is calculated. It seems to me that the GDP in each country is first calculated in the national currency and then ...
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Should Finland leave the eurozone?

Finland's economic recovery from the shock of the global financial crisis of 2007–2008 has been very weak. The country has been in recession for the past three years, with GDP expected to expand by ...