Novak
Lučić
Author(s): Novak LučićSubject(s): Economy
Published by: Ekonomski fakultet Pale - Univerzitet u Istočnom Sarajevu
Keywords: The foreign exchange market, exchange rate, appreciation, depreciation, devaluation, revaluation, the theory of purchasing power parity, the law of equal price, interest rate parity, exchange rate regimes;
Summary/Abstract: Exchange rate of one currency is the price of the currency expressed in units of other currency. It is formed by the interaction of supply and demand in the foreign exchange market. Given that the exchange rate has a direct impact on the competitiveness of a country in terms of features of its exports and imports, in its balance of payments, and indirectly the overall economic and social development, in addition to acting in market principles - supply and demand in the formation of the equilibrium exchange rate, exchange rate is subject to different, stronger or weaker, more or less, forms of intervention. In the search for the optimal exchange rate policy of the national currency, the monetary authorities are positioned between the two extremes - the complete abandonment of the exchange rate to the market laws of supply and demand, or fixing the exchange rate for any of the selected anchor currency.
Journal: Zbornik radova Ekonomskog fakulteta u Istočnom Sarajevu
- Issue Year: 2014
- Issue No: 9
- Page Range: 97-105
- Page Count: 9
- Language: English
