What are the determinants of flexible exchange rate?
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Aside from factors such as interestrates and inflation, the exchange rateis one of the most importantdeterminants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world.Mar 1, 2018
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8 Key Factors that Affect Foreign Exchange Rates
Inflation Rates. Changes in market inflation cause changes in currency exchange rates. ...
Interest Rates. Changes in interest rate affect currency value and dollar exchange rate. ...
Country's Current Account / Balance of Payments. ...
Government Debt. ...
Terms of Trade. ...
Political Stability & Performance. ...
Recession. ...
Speculation.
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