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Currency Exchange Rate: Government
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The situation changes when people lose confidence in the government.s ability to preserve the exchange rate. There are many developments that can cause public concern. Lower oil prices could signal a decline in oil revenues and international reserves. Similarly an increase in trade deficit and international debt could increase the demand for foreign exchange and hence increase the risk that the government will not be able to sustain the current fixed exchange rate. Any of these signals could lead to a sharp increase in demand for foreign exchange as people and firms try to convert their assets into dollar before the government runs out of reserves and abandons the current rate. This anxiety itself will deplete the central bank.s reserves even faster, which, in turn, will cause more panic in the exchange market.
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[I]n floating or self-correcting exchange rate the rates are ever changing with supply and demand of currencies, global and local news, government policies etc. The central bank and the government usually not have any active part in change in exchange rate of currencies but may have to perform substantial tasks to maintain inflation or deflation levels.
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An exchange rate is the rate at which one currency may be converted into another... called rate of exchange of foreign exchange rate or currency exchange rate. Below are government and external resources that provide currency exchange rates.
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