The exchange rate and international trade essay

In the financial plan the place, occupied by the country in a global world culture, is expressed by its balance of payments, representing the result of the international financial transactions of the citizens of this country.

It becomes clear why the actions of the most central banks to lower the national currency rates are caused by the aspiration to provide the competitive advantages for the national exporters.

In the first half of it was one of the most important factors of weakening of the British pound and euro, and also the reason of the repeated interventions of the Bank of Japan, willing to prevent a premature strengthening of yen if compared with dollar.

On the contrary, the prices of the national goods in foreign markets will grow because of the growth of the national currency rates; it can lead to their replacement by the cheaper goods of the other countries.

But if they do not have a price which is determined by fundamentals in the customary sense, then a further pillar of economic thought begins to totter: When the national currency rates are low, the goods of this country get an additional benefit if compared with the competitors in foreign markets; it leads to the export growth.

It is closely connected with the level of the national currency rates as positive Trade Balance means the positive balance inflow of foreign currency to the country; it raises national currency rates. The negative Trade Balance means a low competitiveness of the goods of the given country in foreign markets; it leads to the growth of external debt and a fall of national currency rates.

The Trade Balance is the difference between the sums of export and import of the given country. The functioning of the currency market and the dynamics of the exchange rates are closely connected with the international collaboration in the field of trade, cultural exchanges, and interstate interactions with the international investments.

The currency exchange market often concentrates its attention on the main compound part of the Balance of Payments - the Trade Balance. The Balance of Payments, thus, fixes a ratio of all main types of the international interactions: Evidently, they have monetary causes.

On the other hand, the changes of the national currency rates influence the results of the international trade, and, consequently, the Trade Balance.

Exchange rates compose the price of the monetary unit of a country; it is expressed in the monetary units of the other country. The Trade Balance reflects, first of all, the competitiveness of the goods of this country abroad.- FOREIGN EXCHANGE MARKET OF BANGLADESH Foreign Exchange Market Foreign Exchange Market allows currencies to be exchanged to facilitate international trade and financial transactions.

Evolution of the market in Bangladesh is closely linked with the exchange rate regime of the country. Background of the study Among various subjects in the field of international trade and monetary policy, the relationship between real exchange rate and trade balance is one of the most popular topics, attracting extensive studies in last couple decades.

- International Trade and Finance Speech The United States’ macroeconomy both affects and is affected by international trade and exchange rates; exactly how this.

Custom Exchange Rates and International Trade Essay

So, this is a brief discussion about exchange rate and the theories related to the exchange rate. Part B: Business certainty in international trade: International trade is the exchange of goods and services across different countries. The negative Trade Balance means a low competitiveness of the goods of the given country in foreign markets; it leads to the growth of external debt and a fall of national currency rates.

On the other hand, the changes of the national currency rates influence the results of the international trade, and, consequently, the Trade Balance. IMPACTS OF EXCHANGES RATE CHANGES ON TRADE BALANCE: THE CASE OF VIETNAM 1.

Background of the study Among various subjects in the field of international trade and monetary policy, the relationship between real exchange rate and trade balance is one of the most popular topics, attracting extensive studies in last couple decades.

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The exchange rate and international trade essay
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