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exchange rates       Search catalogue 294910859

STA
Approved

UPD
2012-03-23

DUT
wisselkoersen

DAT
For publications indexed before 2006, see also terms of trade.

IND
1

MIS
The price (rate) at which one currency is exchanged for another currency. Transactions in foreign exchange occur spot or forward (see spot market and forward market) in the foreign-exchange markets. The actual rate at any one time is determined by supply and demand conditions for the relevant currencies in the market. However, probably the best way of viewing the exchange rate is as the economy's device for altering the relative prices of domestic produce, which does not trade internationally; and international produce, subject to import and export. Take an example. Oil is priced internationally, with prices set in dollars. Competitive forces ensure the UK price of oil is the same as the global price. Haircuts, on the other hand, cannot be imported and are priced locally. If the pound devalues (see devaluation), the price of oil remains constant in dollar terms, so automatically rises in pound terms. The price of haircuts remains constant in pound terms, so the relative price of haircuts has fallen. Hairdressing will now be relatively less profitable compared to oil production (exchange rate. The Penguin Dictionary of Economics (1998). Retrieved 30 July 2003, from www.xreferplus.com/entry/445228)

PPN
294910859

UDC
336.748

MRF
336.748

UF
foreign exchange rates

RT
balance of payments
foreign exchange

BSO
11.04.02 INTERNATIONAL FINANCE

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