Foreign Exchange Markets and Establishment of Foreign Exchange Rates (Grade 12 NSC Matric Economics): Flashcards

Price of one currency expressed in terms of another currency

Major financial centres open in different time zones continuously

Currency value increases due to natural market forces

Currency value decreases due to natural market forces

Appreciation = market forces; Revaluation = government action

$\frac{Export\ index}{Import\ index} \times 100$

Currency value determined purely by market forces, no government

Market forces operate but govt intervenes to prevent extremes

Buying goods/services anywhere without government interference

Asia (44.2% imports, 45.3% exports)