Today let us learn together what is the exchange rate

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Today let us learn together what Eastforexcashback the East forex cashback cashbackforexbtc The international price of the goods market - the exchange rate The exchange rate is the international price of money, is a forexcashbackcalculator to another currency expressed in terms of price we can also understand the ratio of two currencies exchanged for each other so some people Also known as the exchange rate, cashback forex exchange rate or foreign exchange market As you know, the exchange rate is changing, we still look at this example, the same or the value of 100 yuan of goods, if the dollar to the yuan exchange rate rose to 1:7.0, that is, the dollar appreciated, the yuan depreciated, the price of this commodity in the international market is $ 14.28, with fewer dollars can Buy this commodity exchange rate has a nominal exchange rate and the real exchange rate of the difference between the real exchange rate and the nominal exchange rate is relative, if the two currencies are not inflationary factors, then the exchange rate between them can be regarded as the real exchange rate However, if a currency depreciates internally due to inflation, or both currencies depreciate, only they depreciate to a different degree, the nominal exchange rate can be logically It can be seen that the exchange rate is not simple, the connection with the economy is quite close, and the response to the economy is also very sensitive We can also appreciate the method of development of the exchange rate as the international price of the currency of the cause of the exchange rate of the development of two main methods, one is the direct markup method, one is the indirect markup method The so-called direct markup method refers to the use of a certain unit of foreign currency as the standard, the conversion of it into a certain In this method, the foreign currency remains unchanged and the domestic currency changes with the change of its own value against the foreign currency. If the exchange rate rises, the amount of foreign currency exchanged for domestic currency increases, while the domestic currency depreciates and the foreign currency appreciates If the exchange rate falls, the opposite change occurs The indirect markup method is a method of converting a certain amount of domestic currency into a certain amount of foreign currency For example, on December 20, 2010, 100 yuan was exchanged for 462.47 rubles and 100 yuan was exchanged for 452.26 Thai strains (Thailand), this representation method is the indirect markup method If the exchange rate rises, the amount of local currency to foreign currency increases, the local currency appreciates and the foreign currency depreciates, and vice versa, the opposite happens From this we can see that the exchange rate as the international price of money, true to its name What factors affect the exchange rate?  The exchange rate plays a very important role in macroeconomic and international economic interactions, what factors affect the change in the exchange rate? Before describing the factors that affect the change in the exchange rate, let us first understand the fixed exchange rate and floating exchange rate fixed exchange rate, is the exchange rate of a countrys currency and another countrys currency exchange rate is basically fixed, fixed exchange rate is not the exchange rate is completely fixed, but restricted to a certain range of rates, controlled by the central bank, so that the exchange rate remains unchanged in the early 19th century to the 1930s gold standard system The gold standard system in the early 19th century to the 1930s, the Second World War to the early 1970s to the U.S. dollar-centered international monetary system, all implement a fixed exchange rate system floating exchange rate is different, its exchange rate changes depend on market demand, the general form of the exchange rate up or down, which is essentially the same as the devaluation and appreciation of the currency, both show that the exchange rate changes with the changes in supply and demand in the foreign exchange market The current exchange rate in China The so-called "basket of currencies" refers to the actual situation of Chinas foreign economic development, the selection of a number of major currencies, given the corresponding weight, the composition of a currency basket basket of currencies, will take into account in our countrys foreign trade, foreign debt, foreign investors, and the foreign exchange rate. Foreign trade, foreign debt, foreign direct investment and other foreign trade and economic activities account for a large proportion of the currency of the major countries and regions RMB exchange rate is no longer fixed on a single dollar, but with reference to a basket of currencies, according to the market supply and demand to float Chinas current exchange rate system will increase the flexibility of the exchange rate of the RMB, to curb unilateral speculation, to maintain the multilateral exchange rate balance We know that the factors affecting the movement of the exchange rate are Many, at present, it is generally believed that the following are the main factors affecting exchange rate changes first First, the direct factor affecting exchange rate changes is the balance of payments situation if other conditions do not change, when a country has a large balance of payments deficit or trade deficit, indicating that the countrys foreign exchange earnings than foreign exchange spending less in this case, it is clear that the demand for foreign exchange is greater than the supply of foreign exchange, foreign exchange rate Up, the currency depreciated to the outside world Conversely, when a country is in a balance of payments surplus or trade surplus, that the countrys exports of foreign exchange income increased, imports of foreign exchange payments are less, foreign exchange supply than expenditure, while foreign demand for domestic currency increased, will cause the currency to appreciate to the outside world, the foreign exchange rate fell Second, the inflation rate also has an important impact on the exchange rate price level is the value of money in the commodity Therefore, with the rise of inflation, the value of the unit of currency decreases, and the purchasing power it represents also decreases, which is what we often call currency devaluation If bilateral trade is basically balanced, when the inflation rate of one country is greater than the other, the local currency is in a disadvantageous position, and the exchange rate depreciates Again, the relative difference in the level of interest rates will also affect the movement of the exchange rate Market economy environment, interest rates and exchange rates are inseparable if a countrys interest rate level is relatively high, foreign currency will flow into the country, so that the demand for foreign exchange will be reduced, the demand for domestic currency will increase accordingly, the exchange rate of the local currency will rise in turn, when the countrys interest rate is low, the demand for foreign exchange will increase, the domestic currency will also spill over, it will cause the exchange rate to fall Finally, we know that countries Central bank intervention will also affect the exchange rate changes because a countrys burst of export trade, the flow of capital and the balance of payments are inextricably linked to the exchange rate, so a countrys central bank will generally intervene in the movement of the exchange rate by affecting the supply of foreign exchange in order to make the exchange rate in the direction favorable to the country In addition, the development of the national economy, the governments macroeconomic policy, the Investment behavior, international economic shocks, changes in the world political landscape and changes in peoples expectations of the economy, and so on, all have far-reaching effects on the movement of the exchange rate and these factors are both interrelated and mutually constraining, and with the passage of time, the strength of their respective effects often alternate, so it is difficult to find out exactly what factors affect the change of a countrys currency exchange rate in a certain The factors that play a major role in one period may not play a role in another period even in the same period, the same factors on the currency exchange rates of different countries and regions are very different appreciation or depreciation, which is better or worse?  Evaluating anything depends on both sides, and exchange rate changes are no exception, whether appreciation or depreciation, each has its advantages and disadvantages We look at the impact of exchange rate changes on the trade balance, in other conditions remain unchanged, currency depreciation will improve the international competitiveness of exports, because exports are expressed in foreign currency, and the depreciation of the local currency makes foreign currency has more purchasing power. Obviously, the direct benefit of currency devaluation is that it is conducive to expanding the export of the countrys products and stimulating economic growth  for example, when exporting $10 million of goods, the income that Chinas exporters can get when settling the foreign exchange is RMB 66.6 million when the exchange rate is RMB 6.66 per US dollar, and when the devaluation is RMB 8.22 per US dollar, the income that exporters can get when settling the foreign exchange is 82.2 million yuan, an increase of income of 15.6 million yuan In this case, export enterprises will have greater motivation to increase exports However, the devaluation of the currency has the opposite effect on imports imports are expressed in local currency, devaluation means that the price of imported products increased, this situation will increase the payment, weakening the demand if the appreciation has the opposite effect, promoting imports and Not conducive to exports Exchange rate changes have a great impact on the trade balance, so what impact does it have on capital flows? We know that in the short term, if a countrys exchange rate declines, the holders of the countrys currency and foreign investors will reduce their holdings of the countrys currency to avoid losses brought about by exchange rate changes, but in the long run, a decline in a countrys exchange rate is conducive to attracting international long-term capital imports, especially foreign enterprises to the country for long-term investment, because foreign enterprises can more cheaply use the countrys resources after the devaluation of the countrys currency. If a countrys exchange rate appreciates, although it is not good for foreign trade, it is good for the countrys foreign investment, such as the appreciation of RMB, which used to take 8.22 RMB to exchange for 1 USD, but now it only takes 6.66 RMB to exchange for 1 USD, which is good for Chinas enterprises to acquire USD assets overseas, for example, to acquire 10 million in U.S. dollar assets, in the past it cost RMB 82.2 million yuan, now it only costs 66.6 million yuan, the cost of acquisition of our enterprises fell  exchange rate changes in addition to the role of the trade balance and capital flows, on prices, international debt and other macroeconomic factors will also have an impact, on the other hand, a countrys exchange rate changes, especially a decline in the exchange rate For the country, it is not all good such as a currency devaluation in the expansion of its product exports at the same time, it is likely to deteriorate the balance of payments of its trading partners, and slow down its economic development, which provides a breeding ground for trade friction, and may even evolve into an exchange rate war, seriously affecting the stability of international finance, leading to a depressed world economic environment From the above-mentioned In fact, whether the currency appreciation or depreciation, usually not a good thing as we know, currency exchange rate changes, often confusing for businesses, but also may cause a certain degree of macroeconomic "chaos" Therefore, in general, the vast majority of countries try to keep the exchange rate of their currency stable

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