If EX<IM so, lower forex will facilitate EX a bit but we will have to pay much more for imported goods. Is that right?
Moreover, lower forex means higher external debt. Therefore, countries with huge debt shouldn't have low forex too?
In my country, both trade decifit and external debt are high but gov still keeps a stable nominal forex while inflation is escalating (which means REER decrease), why?
Most Commented Posts
- August 8, 2008 -- Should "In God We Trust" Remain On American Currency? (41)
- February 26, 2009 -- Xtian: What right (specifically) would be violated by removing "In God We Trust" from US currency? (41)
- January 27, 2010 -- Do conservatives invest in gold because they have no faith in American currency? (37)
- November 24, 2008 -- Is “In God We Trust” on US currency a true statement? (35)
- January 3, 2009 -- Should the motto “In God We Trust” be removed from U.S. currency? ? (34)
- March 17, 2009 -- R&S what do you feel about "One nation under God" on US currency? (34)
- April 21, 2009 -- What would be the impact on American society if "In God We Trust" were removed from the currency? (34)
- May 7, 2008 -- Who else thinks that "in god we trust" should be removed from US currency? (33)
- January 9, 2009 -- Are coins and currency the same thing? (30)
- March 8, 2010 -- If your good looks were currency, what could you buy? (30)
This entry was posted
on Sunday, March 30th, 2008 at 7:27 am and is filed under forex trading.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
March 30th, 2008 at 7:27 am
the exchange rate is determine by markets which make capital inflows and outflows match. This includes trade, investments, tourism, aid, and loans. Inflation happens in all countries and only if the difference in large would it have much effect on exchange rates in a years time.
March 30th, 2008 at 7:27 am
There are many other variables to consider other than forex flows.
Yes you are right theoretically with EX<IM.
2nd point: Just have a look at the USA. Don't they have a trillion dollar debt? look at their dollar now. But there are also internal factors to consider like interest rates.
3rd point: could be internal factors like money supply, employment, interest rates, government. Look at China's currency. Isn't that "pegged" to a certain extent?