Currency conversion method: principal * exchange rate = convertible foreign currency. The main factors affecting the exchange rate are: relative price level, tariffs and quotas, preference for domestic goods relative to foreign goods and productivity. In the short term, the exchange rate of a country or region is determined by the foreign currency demand and supply of that country or region.

Extended data:

In the short term, the exchange rate of a country or region is determined by the foreign currency demand and supply of that country or region. Foreigners buying their own goods, investing in their own country and investing in their own currency will all affect the demand for their own currency.

Domestic residents want to buy foreign products, invest in foreign countries and speculate in foreign exchange, which affects their money supply. In the long run, the main factors affecting the exchange rate are: relative price level, tariffs and quotas, preference for domestic goods relative to foreign goods and productivity.