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The philippine peso and foreign currencies

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by

Diana Rose Lucban

on 1 November 2015

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Transcript of The philippine peso and foreign currencies

Determining the Value of Peso
Importance?
1. It serves as the basic link between the local and the overseas market for various goods, services and financial assets.

2.Exchange rate movements can affect actual inflation as well asexpectations about future price movements.

3.Exchange rate movements can affect the country’s external sector through its impact on foreign trade.

4.The exchange rate affects the cost of servicing (principal and interest payments) on the country’s foreign debt.
How does it changes?
1.
Fixed Rates
-the value of the currency is determined by the nation's central bank and held in place by central bank actions, mainly the purchase and sale of the currency.

2.
Floating Rates
- Market forces: Supply and demand.

3.
Managed Rates
- A mix of both fixed and floating rates.
Why did the BSP adopt a floating rate system?
Dollar as international currency.
Why?
what is exchange rate?
The
exchange rate
is the price of a unit of foreign currency in terms of the
domestic currency.
The philippine peso and foreign currencies

Exchange rate
What is Exchange Rate?
Importance?
How does it changes?
Types of exchange rate:
1944 Bretton Woods Agreement
Fall of Bretton Woods Agreement
Options: Floating Rates or Revaluation of Gold.
Dollar as international currency

What is the history behind?
Full transcript