Questions tagged [exchange-rates]

the price at which one currency may be exchanged for another.

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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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Does Russian Ruble strengthening mean the sanctions did not hurt Russian economy?

After imposing the sanctions to Russia, 1 USD skyrocketed to 139 Rubles, but now it is back to the pre-war exchange rate. Moreover, it kept decreasing almost every day recently. Does this mean that ...
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How does US inflation impact dollarized nations?

For instance, would a high inflation rate on the US have any impact on countries that use the US dollar as their only legal tender, eg Ecuador or El Salvador? I often hear that high US inflation will ...
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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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Did Russia's GDP per capita really fall 38% between 2013 and 2020?

GPD per capita usually goes up over time due to improvements in technology, but Russia's fell dramatically from \$16,000 to \$10,000 in the 7 years from 20131. There was little change in Russia's ...
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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 ...
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4 votes
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Why does Russian ruble conversion rate to USD remains constant at 1 to 0.01?

I've been noticing that since Russian ruble started losing its value compared to other foreign currency, at some point it became at constant exchange rate of 1 RUB to 0.01 USD. That is, every day no ...
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Do exchange rate regimes *actually* matter?

Just read Itskhoki and Mukhin (2021) and they make the argument that because the change of monetary regime in 1971 from pegged exchange rate to floating only led to a change in volatility of the real ...
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How important are exchange rates for achieving full employment?

We often witness large swings in exchange rates without significant effects on GDP growth or inflation. Obviously it is difficult to isolate exchange rate effects however are they actually that ...
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How to make sense of Lebanese currency values in USD with a PPP conversion factor?

For example, I have data from a survey of adult citizens in 2014 showing an average annual salary of about 20000 LCU. I would like to find a comparable measure of the standard of living in Lebanon ...
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What does the price of bitcoin per ounce of gold tell us?

For example, see the below graph from https://charts.woobull.com/bitcoin-vs-gold/ It seems that intention is to isolate the effect of US dollar when assessing bitcoin's value, e.g. BTC quoted in US ...
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Monetary sterilization’s working is wrong?

Say, there is an increase in demand for dollars (as compared to the other currency, say yen), which will put appreciation pressures on dollar. Then to counter this appreciation, we need to buy yen. ...
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Does countries for which exchange rate is falling become cheaper

Is it a good idea to visit those countries whose currency is falling? (As in exchange rate). In another words does the items there become cheaper if I could now get more money in there currency for ...
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Is there any situations where real exchange rate positively impacts on national imports?

I'm working on a gravity model analysing the factors that affect national imports, and the results showed that the real exchange rate (real exchange rate between local currency and foreign currency) ...
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Relationship between Treasury yield and dollar

I understand it is common sense that treasury yield goes up, the dollar goes up as well due to the fact that domestic/foreign money are attracted to the higher yield therefore they need to buy more US ...
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Why is there such a big difference of purchasing power toward Coca-Cola between Euro in France and USD in USA, comparing to Big-Mac?

I have an assignment that requires me to pick an item and use it to create my own price level index, similar to Big-Mac index. In March 2021, the price of 0.5 litre Coca-Cola in France was 0.97 Euro ...
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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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How are the rates between two currencies (fiat and cryptocurrecies) determined? [duplicate]

How are the exchange rate between two countries determined? For example how is exchange rate between the dollar and the euro established? My guess is it has to do with some form of demand/supply but I ...
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If the BOP is always equal to 0 then why would a trade imbalance cause currencies to fluctuate?

I am a bit confused in interpreting the correlation between a trade deficit/surplus & currency depreciation/appreciation. Considering BOP always equals 0 and a outflow in the current account is ...
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What are the main causes of disparity between nominal and PPP exchange rates?

(I'm not a student of economics and I have no idea about correct terminology and things. ) I've seen the acronym "PPP" in various places for a long time, but it's only recently I became ...
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Deflating value series in currency A with CPI based on prices in currency B?

Say we have time series data on the annual value of imports in the UK from the US (in US dollars). Would it be appropriate to deflate the latter using the UK Consumer Price Index (which is based on ...
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Effect of import quota on NCO, NX

I'm studying loanable funds from the book "Brief Principles of Macroeconomics, 6th ed". On page 307, the effects of an import quota are explained below. It said the net export rises, but NCO ...
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The impact of a devaluation of the national currency under a fixed exchange rate system

I would really be thankful if any of you could check my answer to the following question. Question: Describe, using the IS-LM-BP model, the impact of a devaluation of the national currency under a ...
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Shifts in IS in a fixed exchange rate mechanism

First, we assume we are in a fixed exchange rate mechanism. In this system, I deduce that the expected exchange rate would be fixed, at the market rate. In a floating system, with open capital markets,...
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Why would foreign asset purchases by PBOC temper yuan appreciation?

Suppose the PBOC buys a bunch of dollar-denominated bonds, using its dollar reserves. All else equal, what effect should this have on the yuan-USD exchange rate? And why? It amounts to trading non-...
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Why doesn't Dollar exchange rate go down?

I am from India and my question is related to conditions based in India which may be applicable to other countries as well. Dollar value is gradually rising in India. I was trying to understand why. ...
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1 vote
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Convert data in current US dollars to constant international dollars (PWT)

I would like to convert a nominal GDP series in US dollars to real GDP at constant PPP using Penn Wold Table (PWT) version 10.0 (see here). So far, I managed to get the real GDP at current PPP. Using ...
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Dynamics of interest rates, exchange rates and bond prices within the UIP

There are already a few questions about the workings of the UIP and the exchange rate. What I have basically taken from those discussions is that one always has to distinguish between the spot rate ...
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Value of Mexican Peso vs US Dollar in 1920s -- is silver content complete determiner?

I am rewatching The Treasure of the Sierra Madre which is set in Mexico in 1925 and they seem to use the term peso and dollar interchangeably -- for example, the trio of prospectors need another 100 ...
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Demand Curve of Foreign Exchange

My high-school Macroeconomics textbook states that 'There is an inverse relationship between the price of foreign currency, or exchange rate, and demand for foreign exchange. When the exchange rate ...
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Real Exchange Rate (Euro/Sterling)

What will be the real value of the Euro/Sterling exchange rate if: Given that: Index of UK prices$=118$, Index of Euro-area prices$=110$, Nominal Euro/Sterling exchange rate$=1.58$ and UK marginal tax ...
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Linearization around the steady state (Asset pricing application)

I am working through a linearization example from Colacito and Croce (2011). In the paper the following expression is derived: \begin{align} & (v^{i}_{c,t})^{\theta}=E_{t}[\delta e^{\Delta c^{i}_{...
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Microeconomic rationale for UIP (uncovered interest rate parity)

The key idea behind UIP is that as for all common financial instruments, the "law of no free lunch" should also hold for currencies. However it differs from traditional replication-based no-...
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Does inflation/expected inflation in a given country devalue its currency or increase its value?

I've seen both arguments. From my understanding an increase in the rate of inflation should decrease the value of the currency since it's by definition a depreciation in its purchasing power. But I've ...
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Exchange rate modeling using a system of ODEs

I am looking for a book that explains exchange rates, capital flows, reserves, trade balance using a system of ordinary differential equations. An economist by the name of Muller-Plantenberg has this ...
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Why is the US rating AAAA+ after they printed trillions of dollars out of thin air, and bailed out the US stock market? [closed]

When any other country tries to print, there's huge inflation, devalued currency, bad ratings from rating companies (mostly US go figure why?), interest rates increases. But why don't these happen to ...
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How do you read currency exchange rates in terms of domestic and foreign currency?

I am having some issues understanding how to read exchange rates. E is the exchange rate I read online that if we have for example E\$/€, then the base currency in this case is the dollar and the ...
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How to define world interest rate using IS-LM-BP diagram?

Can you suggest where is the world interest rate in the economy which has a positive current account and a financial account surplus, fixed exchange rate and relative capital immobility? The graph of ...
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How do transactions in different currencies work?

Very basic question but I have not much knowledge in this field so sorry: Say I have a bank account and over the past year there were transactions in different currencies. I am guessing that a ...
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Math based proof for currency changes

This isn't part of my homework but I am genuinely interested in the mathematical proof behind this question (this is my line of work currently). I tried to work through it but after 2 hours gave up. ...
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Real Exchange Rate Cross Rate

I have to do a study to determine the real exchange rate . I've read about the purchasing power parity and the interest rate parity . I also found the cross rate formula and was wondering if the ...
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What are some currencies that are not pegged and fixed?

Are there any currencies that are not pegged to the dollar or euro and are purely fixed exchange rates?
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How are PPP, nominal exchange rates and inflation related?

This Forbes article discusses how changes in the market exchange rate can be used to estimate an inflation rate thanks to the principle of purchasing power parity (PPP). Can someone distill this ...
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What does it mean if a country's exchange rate is said to be “overvalued”?

For instance, China's or Switzerland's currencies are often said to be overvalued.
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Depreciation of local currency and its effect on prices

I have problem with an article Lee H., C. Park, 2013, International Transmission of Food Prices and Volatilities: A Panel Analysis. Authors wrote: Difference in log of exchange rates (LOC/ $)- As ...
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Forecasting quarterly EUR/USD exchange rate

My aim is to forecast the one-quarter ahead EUR/USD exchange rate. I have constructed a regression model with the following as explanatory variables: exchange rate in the previous quarter, EUR/USD ...
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Problem with interpretation of exchange rate

I found an article in which one of explanatory variable is "neer". From this article "The rise (decline) in this variable points to the appreciation (depreciation) in excess of the appreciation of the ...
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echange rate from LOC/EUR to EUR

I have import values in LOCEUR (LOC is local currency). How can I obtain these values only in EUR? My data are from Eurostat, where external trade indicator is "Exports in million of ECU/EURO"
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Meaning of Exchange rate

Does exchange rate of local currency relative to US dollar mean LOC/USD or USD/LOC ?
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How long can I live in the United States with my German monthly income?

I see different (more or less abstract resp. specific) approaches to compare wealth (of individuals, regions, and countries): by living standards by living expenses by incomes/salaries by purchasing ...
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