Explain the six major factors that influence foreign exchange rates

Explain the six major factors that influence foreign exchange rates

Explain the six major factors that influence foreign exchange rates:Complete the written assignment in essay format and include an APA cover page . Do not use bullet points for your answers.

Q1. Explain the six major factors that influence foreign exchange rates (1 page)

Q2. You are an IMF official going to a country whose export earnings are not able to pay for imports. The government has requested a loan from the IMF. Which areas would you recommend the government to cut and why? (1) education, (2) salaries for officials, (3) food subsidies, and/or (4) tax rebates for exporters?[1 page]

……………………….Answer preview……………………..

The inflation rate is one of the major factors that affect the foreign exchange rates. A higher inflation rate translates to a decrease in the currency value of a country as compared to those of others. In effect, the interest rates peak higher. As for a lower inflation rate, a country’s value of currency increases leading to an increase in the purchasing power (Bergen, 2016)…………………

APA

596 words

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