2. On the contrary, if the exchange rate of direct quotation rises, that is, the local currency depreciates, the amount of local currency converted into foreign currency increases, the export profit increases, and the export competitiveness improves, it will lead to an increase in net exports.
3. Exchange rate fluctuation refers to the fluctuation of currency external value, including currency depreciation and currency appreciation. The exchange rate is the price at which a country's currency is converted into other currencies. Exchange rate change refers to the change of exchange rate or the change of the value of one currency relative to another. There are many factors that cause exchange rate changes, such as trade and inflation.
Exchange rate fluctuation refers to the fluctuation of currency external value, including currency depreciation and currency appreciation. The exchange rate is the price at which a country's currency is converted into other currencies. Exchange rate change refers to the change of exchange rate or the change of the value of one currency relative to another. There are many factors that cause exchange rate changes, such as trade and inflation.
Currency devaluation refers to the decline of the external value of a country's currency or the decline of its currency exchange rate. The extent of exchange rate decline is expressed by the extent of currency depreciation.
influencing factor
(1) balance of payments. Under the indirect pricing method: when a country's foreign current account balance is in surplus, the supply of foreign exchange (currency) exceeds demand in the foreign exchange market, so the local currency exchange rate rises and the foreign currency exchange rate falls; On the other hand, when a country's international expenditure exceeds its income, it will have a balance of payments deficit, which means that the supply of foreign exchange (currency) is less than the demand of the foreign exchange market, so the exchange rate of its own currency will fall and the exchange rate of foreign currency will rise.
(2) the difference of inflation rate. When inflation occurs in a country, the cost of its commodities will increase, and the price of export commodities denominated in foreign currency will inevitably rise, thus weakening the competitiveness of this commodity in the international market, leading to a decrease in exports, while improving the competitiveness of foreign commodities in the domestic market, leading to an increase in imports, thus changing the current account balance. In addition, the difference of inflation rate will also affect the income and expenditure of capital and financial accounts by affecting people's expectations of exchange rate. On the contrary, countries with low relative inflation rates tend to appreciate their currency exchange rates.