Cause why the fluctuating exchange rate rises Discuss whether it can always profit the country by evaluating the exchange rate of a certain country at all times. a) Cause of fluctuating exchange rate rising b) Discuss whether rising exchange rate of the country is always beneficial for the country. (15) Freedom, volatility or fluctuating exchange rate means the existence of a free or competitive foreign exchange market where the price of one currency is determined by the price of another currency and the supply-demand relationship functions without official intervention I will.
Variable exchange rate Most major and relatively stable currencies use fluctuating exchange rates (or fluctuating exchange rates). This is determined by the power of supply and demand. The value of money depends on market factors including interest rate, consumer and inflation data, political situation, and fluctuations in key exports. Currencies that use floating exchange rates include US dollars, British pounds, and euros. An easy answer? Because they can. Banks know that 80% of consumers are using their banks to transfer funds to overseas. * Many people do not need to provide a competitive price as they do not know the profits they claim. (When asked about these rates, 75% of consumers said these fees were "very high" or "bank plagiarism"))
Malaysia is a floating exchange rate system. The floating exchange rate system is a foreign exchange rate system that makes it possible to determine the value of money only by the demand and supply of money in the foreign exchange market. According to the report, the rise in ringgit is due to strong fundamentals, strong banking system, positive sentiment of local currency, and interest rate differential compared to the US dollar. Strong currency can cause problems that damage export and domestic industry. Because exporters are relatively expensive, you may find it difficult to sell goods and services overseas. Also, because imported items are relatively cheap and purchased at a higher level
In July 2005, the RMB exchange rate for the 5 US dollar (PBC 2005a), which adopted the controlled floating exchange rate system with reference to "currency basket", immediately rose to 8.11 and became daily trading price. The US dollar in the interbank market is allowed to fluctuate within ± 0.3% a day. Currencies other than the US dollar were initially allowed to fluctuate within ± 1.5% and expanded to ± 3% in September 2005 (PBC 2005b). Due to the seriousness of the international financial crisis in 2008, China was obliged to reduce the fluctuation range of the yuan to mitigate the impact of the crisis (Hu, 2010). This regulation has been relaxed, and since June 2010 the exchange rate has become more flexible. Since then, the People's Bank has expanded its adaptation to the exchange rate, the US dollar exchange rate in 2007 rose to 0.5% to 1.0, and in 2012 it rose to 2.0%. During the period from mid 2010 to the end of 2013, the renminbi rose 10% (Figure 4).