Title: Currency Rate
1Currency Exchange Rate
- Exchange rate is a rate at which one currency
will be exchanged into other currency. For
example today rate of One USA dollar can be
compared with Indian Rupees. - Exchange rate will be always conversion rate of
stronger currency to your currency. For getting 1
US , you will have to pay Rs. 44.89. So, this is
exchange rate.
2Features of Exchange Rate
- 1. Exchange Rate always fluctuates Due to
Stronger or Weaker of Currency - 2. Exchange rate always are affected from balance
of payment and trade, interest rate (inflation
rate), economic growth and fiscal and monetary
policies and political issues - 3. Exchange rate are two types, one is buying
exchange rate and other is selling exchange rate - 4. Bid Vs Offer
3Exchange Rate always fluctuates Due to Stronger
or Weaker of Currency
- It is the main feature of exchange rate that it
always fluctuates. - If our currency will strong at that time, our
exchange rate will differ from previous exchange
rate. Suppose, today, one dollar's exchange rate
is 68.89. - If tomorrow, our currency strong, we have to pay
less for buying one dollar. It may be Rs. 67 or
Rs. 68 for one dollar. - This shows also the appreciation of our currency.
Weaker of our own currency means depreciate our
currency. - At that time, we have to give more money for
buying one dollar. It may be Rs. 68 or Rs. 69.
4Exchange rate are two types
- Exchange rates are of two types.
- One is buying currency exchange rate and other is
selling exchange rate. Both rate may or may not
be equal.
5Bid Vs Offer
- Suppose we compare BP with USD and its bid may be
1.61863 USA dollar for every one British pound
and its offer may be 1.61867 USA dollar for every
one British pound.
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