Exchange Rate FAQs:


Q: Are exchange rates determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends, i.e?

A: Yes, trading from 20:15 GMT on Sunday until 22:00 GMT Friday.

Q: Is an exchange rate allowed to vary against that of other currencies and is determined by the market forces of supply and demand?

A: Yes.

Q: Is an exchange rate reflected into the forward exchange rate stated today?

A: Yes.

Q: Is an exchange rate a weighted average of a basket of foreign currencies?

A: Yes, and it can be viewed as an overall measure of the country's external competitiveness.

Q: Is an exchange rate the exchange rate times the relative prices of a market basket of goods in the two countries?

A: Yes.

Q: Are exchange rates at an equilibrium level if they produce a stable current account balance?

A: Yes.