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Export Exchange Rate

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Export Exchange Rate

(This article was first published by Myforexeye Fintech Pvt Ltd)

Simply put, exchange rate movements affect exports in two ways. One, it is rate depreciation and the other is rate variability (risk). Where, depreciation raises exports on the other hand, its associated exchange rate risk can offset the positive effects.

Depreciation lowers the foreign currency price or Export Exchange Rates and this thereby increases the quantity of exports and the export revenue in domestic currency. Conditions may exist however where export revenue falls. Highly inelastic foreign import demand actually leads to falling export revenue. Ambiguity take precedence when export production incorporates high import content, since the domestic cost or price of exports rises with depreciation. At such times, appreciation and exporters tend to price to market, lowering their domestic currency price to maintain export market share.

An exchange rate is a rate at which one currency is exchanged for another. It is the value of one country currency in relation to another currency. The exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers.

The large global banks are involved in the interbank Forex Market through their external clients and own banks. External clients include other large banks, exporters, importers, multinational firms, central banks, and large non- bank financial institutions.

Read for more detial Source Reference: Export Exchange Rate

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