There are many currencies all over the world, the entire network of country has their own currency and it is also a business these days. As the tourism increases all over the world and the business deals matter for the business men thus the currency matters. The currency has positive and negative impacts both, on many lives. If you search the currency values then those will be different, the comparison of the values of the currencies is different for example the value of one US dollar to Pakistani Rupees is 100.3 at the moment, and that of the Iraqi Dinar is 1162 Dinars to one dollar. The change in this currency is dependent on many factors; these are discussed in this and the next articles. The currency demands are the reasons; let’s take a look at these factors.
1) Printing of Currency:
The value can be decreased if something is in large numbers available. This is like the more the stuff the lesser the value. If a country is printing excessive currency notes then for sure the value will get down. Any time you have more of anything; this can result in a decrease in its value. Thus the printing also plays an important role in the value determination. When the amount of currency is in large amounts circulated in the country then it sure the less valued currency. If a country produces less notes the value stays put or not lessens.
2) Current State of the Economy:
The economy is for sure the best and the biggest role players in the currency’s values. For example at current the Iraqi economy is not that better or stable due to all the war and other situations, thus the value of Iraqi dinar is very less as compared to the US dollar or any other currency currently. It also can be thought of as the degree of unemployment in the country, more the unemployment the lesser the values. If the country’s currency is low then it means the economy is also poor. The potential of the economic growth can tell the truth.
3) Prices of Foreign Goods:
The foreigners also play a good part in the valuation of the country’s currency. If there are foreign products sold in the country that are cheaper than the country’s products then the value will surely decrease. A poor economy results in a decrease in demand for that countries currency, which lowers its value.
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