Exchange rate system The country of choice is Ukraine. Ukraine was chosen because of its interesting political, social, and economical changes the country experienced during the last year. According to www.oanda.com, the currency exchange rate is 100,000 US Dollar = 525,200 Ukraine Hryvnia (as per Wednesday, July 19, 2006).
Median price = 4.80515 / 5.25200 (bid/ask) Minimum price = 4.78760 / 5.23490 Maximum price = 4.80710 / 5.25390 We have invested an imaginary $100,000 in Ukrainian currency. $100,000 in Ukrainian currency equals 525,200 Ukraine Hryvnias (UAH).
Lets examine rate developments of this currency during the past twelve months using the table from http://www.oanda.com/convert/fxhistory: Conversion Table: USD to UAH (Interbank rate) (Time period: 07/19/05 to 07/19/06) time period Average High Low 07/19/05 to 07/19/06 5.03521 5.03000 4.76180 08/19/05 to 09/19/05 5.00907 5.01000 4.78770 09/19/05 to 10/19/05 5.04397 5.08700 4.78770 10/19/05 to 11/19/05 5.03670 5.05400 5.00000 11/19/05 to 12/19/05 5.05032 5.04500 4.78100 12/19/05 to 01/19/06 5.08069 5.15300 4.78950 01/19/06 to 02/19/06 5.13293 5.19000 4.78830 02/19/06 to 03/19/06 5.12417 5.06350 4.78830 03/19/06 to 04/19/06 5.26268 5.06500 4.79120 04/19/06 to 05/19/06 5.25103 4.86830 4.75990 05/19/06 to 06/19/06 5.24203 4.85350 4.76360 06/19/06 to 07/19/06 5.23547 4.84820 4.73720 How to read this table: Each daily rate is the average ASK price for the day. The AVERAGE rate is the average of all the ASK prices for the given time period. The HIGH rate is the highest BID rate for the given time period.
The Term Paper on Exchange Rate Countries Currency System
1. INTRODUCTION The end of the 80's and the beginning of the 90's of the last century was the time of big changes for the countries in the Eastern and Central Europe. The change of almost 50 years of tradition started with the fall of the Berlin wall, disintegration of the Czechoslovakia and Yugoslavia, and reached its pinnacle with the fall of the Soviet Union and the so-called Iron Curtain. This ...
The LOW rate is the lowest BID rate for the given time period (Oanda.com Website n.p.) Due to unstable political situation the currency of Ukraine faces critical days. Although the National Bank of Ukraine claims that inflation continues to decrease (according to the information from National Bank of Ukraine Website the tempo of consumer inflation reduced to 6.8% in comparison to 7.3% (May 2005).
Inflation reached its peak in August 2005 (14.9%).
However, the National Bank of Ukraine claims that inflation doesnt impose any threat to the population of Ukraine. Inflation for the period of January-June 2006 has reached 2.9%. The prognosis for Ukrainian currency is quite difficult to predict.
Obviously it will depend on several social, political, and economical factors the perspectives of which are quite indefinite. Some of the factors include: prices for energy carriers, the future of Ukrainian export of metal within the context of PR company, started by Moscow concerning the radioactivity of Ukrainian metal production. Moscow economists and politicians claim that the Ukrainian metal is made of radioactive Chernobyl scrap metal. Other factors include the continuation of continuous conflicts in Verchovnaya Rada , awful condition of foreign market of shares, to mention a few. Despite of such unfavorable prognosis, the position of dollar will be quite strong. The rate of USD will not increase considerably as stability creates favorable conditions for the development of Ukrainian economy. In case the UAH will strengthen its positions considerably, the export will be influenced negatively.
At the same time, the extreme in other measures can cause exchange devaluation panics. Answers.com Website examine different types of exchange rate system such as floating, fixed, pegged, etc. According to the article, fixed exchange rate (pegged exchange rate) is matched to the value of another single currency or to a basket of other currencies, or to another measure of value such as gold (n.p.) and has its aim to maintain a countrys currency value within a very narrow band. The fixed rate aids the government to maintain low inflation and provides greater certainty for exporters and importers (n.p.).
The Essay on Exchange Rate System 2
Exchange Rate System In finance, the exchanging rate between two currencies means how much one currency is worth in terms of the other. There are a lot of factors that influence this correlation; and among them there is economic growth, inflation, political and social situation in the countries. According to the facts, reported by Lyudmyla Musina, Head of the Economic Strategy Department of the ...
Floating exchange rate is an opposity to a fixed exchange rate system. Ukraine has exchange agreements involving more than one market. However, the currency is closely connected to the USD rate exchange and is defined as fixed exchange rate.
Bibliography Answers.com. Fixed Exchange Rate. Retrieved July 19, 2006. http://www.answers.com/topic/fixed-exchange-rate Application 1. The dynamics of 1USD/1UAH (FOREX) (Finance.ua Website) 10.04.2006 – 19.07.2006 04.2006 10 4.8667 19 4.8345 25 4.8268 11 4.8611 20 4.8353 26 4.8013 12 4.8611 21 4.8351 27 4.8030 13 4.8321 22 4.8254 28 4.7998 14 4.8293 23 4.8133 29 4.7944 18 4.8191 24 4.8215 30 4.7605 05.2006 01 4.7605 13 5.1130 24 5.1410 02 4.7605 14 5.1143 25 5.1508 03 5.0973 15 5.1034 26 5.1279 04 5.0830 16 5.1062 27 5.1531 05 5.0376 17 5.1152 28 5.1523 06 5.1202 18 5.1712 29 5.1590 09 5.1335 19 5.0954 30 5.1314 10 5.1065 20 5.1164 31 5.1282 11 5.0826 21 5.1258 12 5.0498 22 5.0971 06.2006 01 5.1185 11 5.0932 22 5.0656 02 5.0888 12 5.1014 23 5.0882 03 5.0674 13 5.0945 24 5.1031 04 5.0670 14 5.0936 25 5.1052 05 5.0637 15 5.0819 26 5.1059 06 5.0739 17 5.0879 27 5.0850 08 5.0977 18 5.0952 28 5.0939 09 5.1258 19 5.0852 29 5.1055 10 5.0927 20 5.0883 07.2006 01 5.0528 07 5.0970 13 5.1045 02 5.0577 08 5.0797 14 5.1042 03 5.0545 09 5.0797 15 5.1144 04 5.0938 10 5.0838 16 5.1186 05 5.1242 11 5.1037 18 5.0876 06 5.1418 12 5.0932 19 5.1246.
