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Following factors affect exchange rates

  1. Demand of Foreign Exchange
  2. Supply of Foreign Exchange
  3. Income
  4. Speculation
  5. Interest Rates
  6. Purchasing Power theory


We have already studied about Demand and Supply in last page

Let's learn about other factors now

Factors affecting Exchange Rate under Flexible Rate System - Teachoo.JPG

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Factors affecting Exchange Rate under Flexible Rate System Factor Supply of Foreign Currency Demand of Foreign Currency We have already studied Decrease Depreciation Increase Appreciation Decrease Appreciation Increase Depreciation Income Speculation Interest Rates Purchasing Power Theory These we will study now

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years and a teacher from the past 17 years. He teaches Science, Economics, Accounting and English at Teachoo