Assignment Replace Currency For Free

Turkish President Recep Tayyip Erdogan's unconventional economic policies have been blamed for the country's currency crisis. The story so far: Turkey's official currency, the lira, has been in a free fall recently, losing about a quarter of its value against the U.S. dollar in November.

Currency substitution is when a country uses a foreign currency instead of or in addition to its own. Currency substitution is also known as dollarization when the U.S. dollar (USD) is the currency that is being used as a substitute.

Simply explained, in order to weaken its currency, a country sells its own currency and buys foreign currency usually U.S. dollars. Following the laws of supply and demand, the result is that the manipulating country reduces the demand for its own currency while increasing the demand for foreign currencies.

If they are right then the value of their currency rises and they can sell for a profit.If a trader believes the pound will increase in value against the dollar then they use dollars to buy pounds. If the exchange rate rises then they can sell the pounds back for a profit.

A weakening dollar in itself makes foreign goods and services more expensive for American consumers and businesses, and should the dollar lose the reserve currency status, it would make our transactions more expensive as well costs that businesses would pass on to US consumers.

If a new note of new denomination is to be introduced. The central bank sends a proposal to the finance ministry which then on analyzing it forwards it to the head of the state of office like PM or President, depending on the country you are in.

A global currency would mean all transaction costs related to international finance would be eliminated as well. Exchanging currencies always requires a conversion, which banks charge as a fee, and there can be a loss in value in changing one currency to another. Having one global currency would eliminate all of this.

In a normal currency exchange transaction, you will usually lose a spread. It's the difference between the buying and selling price of a currency. This is why you see buy and sell rates at exchange outlets and banks. In retail banking, the spread is a few cents on the dollar.

Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system in which no official currency value is maintained. Currency appreciation in the same context is an increase in the value of the currency.

Changes in the value of a currency are influenced by supply and demand. Currencies are bought and sold, just like other goods are.As you will see below, supply and demand of a currency can change based on several factors, including a country's attractiveness to investors, commodity prices, and inflation.