Exchange rate change problems. Why do currency rates change? The change in the exchange rate is called

Exchange rate- the price (quotation) of the monetary unit of one country, expressed in the monetary unit of another country, precious metals, securities.

As in any market, the demand for currency and its supply is concentrated in the foreign exchange market, and the price of the currency as a special commodity is formed. The unit price of a foreign currency, expressed in national currency, is the exchange (exchange rate) rate. Thus, the exchange rate expresses the ratio between the monetary institutions of different countries.

In general, the exchange rate system is a set of rules by which the role of the Central Bank in the foreign exchange market is described. Particular cases of systems are rigidly fixed exchange rates and absolutely flexible exchange rates, which are set in foreign exchange markets without the intervention of the Central Bank.

Changes in exchange rates can occur for various reasons, but nevertheless, the main ones can be distinguished:

1. Output (publication) of economic data, waiting for their release.

What economic data release can affect the exchange rate? First of all, this is the publication of indicators of economic indicators of those countries whose currencies are traded, or a change in the refinancing interest rate. Also, various reviews about the financial and economic situation of countries, other economic events, for example, the end of the financial year, public speeches of heads of state (or other top officials of the country) with statements about planned changes in state policy, presentation of projects can also influence the price of the national currency. the state budget and many others.

In anticipation of these events, exchange rates are subject to significant fluctuations. Sometimes the expectation of an event (for example, the publication of a new interest rate of a state) more intensely affects the exchange rate of this country than the event itself. Therefore, the release of such important economic data as the Nonfarm payrolls, Industrial production, CPI, GDP, PPI indices can lead to tangible movements in the market rates of various currencies.

2. Activities of foundations.

The activities of various funds (pension, investment, insurance) also affect the fluctuations in exchange rates in the market. After all, the direction of activity of these funds is investing money in various currencies. They are quite capable of influencing the movement of the course in a certain direction. The vast resources of these funds are managed by professionals - the so-called fund managers. After conducting a serious analysis of the state of the financial markets, they open profitable positions in the foreign exchange market, trying to work, as it were, ahead of events. Significant amounts of funds are capable of realistically managing even the strongest trends. Naturally, this should not be some small pawnshop, but a fairly large enterprise.

3. Activities of market exporters and importers.

Exporters and importers are users of the foreign exchange market. Exporters sell this or that foreign currency, importers buy it. Large export-import companies, through their in-house currency speculation specialists, try to predict currency fluctuations in order to make profitable trade deals. However, the impact of this group of market participants is rather short-term and is not able to change the direction of global trends, because the percentage of their transactions is small in the total mass of foreign exchange transactions.

4 ... Central Banking Activities.

Through its central bank, the state influences the foreign exchange market. Countries with floating rates of national currencies are trying to regulate the exchange rate of their currencies in the interests of the state with the help of certain currency transactions. In this case, either direct (foreign exchange intervention) or indirect regulation (regulation of the amount of money in circulation) is used.

From this we can conclude that the problems that arise on the way of changes in the exchange rate are directly related to the problems of its change. Those. if any violations or failures occur at one of these points, this leads to the appearance of a problem as a whole.

The problem of changing the exchange rate is its impact on the economy of the state. Those. if changes in the exchange rate somehow affect the economy, then the problem of its change arises.

The exchange rate affects:

· Foreign trade;

· The economic growth;

· Inflation rate, etc.

Factors affecting the exchange rate:

The state of the trade balance;

Relative price change;

Relative changes in income;

Changes in consumer tastes.

Like any price, the exchange rate deviates from the value basis - purchasing power parity of currencies - under the influence of supply and demand of the currency. The ratio of such supply and demand depends on many factors that reflect the relationship of the exchange rate with other economic categories - value, price, money, interest, balance of payments, etc.

Distinguish between market and structural (long-term) factors that affect the exchange rate.

Conjunctural factors are associated with fluctuations in business activity, political and military-political situation, according to rumors (sometimes excitement), guesses and forecasts.

Along with conjunctural factors, the impact of which is difficult to foresee, on the demand and supply of foreign currency, i.e. the dynamics of its exchange rate is also influenced by relatively long-term trends that determine the position of a particular national monetary unit in the currency hierarchy.

These factors include the following:

1. Growth of national income. This factor determines the increased demand for foreign goods, at the same time, merchandise imports can increase the outflow of foreign exchange.

2. The rate of inflation. The ratio of currencies in terms of their purchasing power (purchasing power parity) is a kind of axis of the exchange rate, therefore the rate of inflation affects the exchange rate. The higher the rate of inflation in the country, the lower the rate of its currency, if not opposed by other factors. This trend can usually be traced in the medium long term. The equalization of the exchange rate, bringing it into line with purchasing power parity, takes place on average within two years.

3. The state of the balance of payments. The active balance of payments contributes to the appreciation of the national currency, since at the same time, the demand for it on the part of external debtors is increasing. A passive balance of payments gives rise to a downward trend in the exchange rate of the national currency, since debtors sell it in foreign currency to pay off their external obligations. In modern conditions, the influence of the international movement of capital on the balance of payments and, accordingly, on the exchange rate has increased, since the competitor of the foreign exchange market is the securities market - stocks, bonds, bills of exchange, short-term deposits.

In developing countries, the securities market can slow down the growth of the foreign exchange rate, diverting free cash from the exchange for hard currency.

4. Difference in interest rates in different countries. The influence of this factor on the exchange rate is determined by two main circumstances. First, the change in interest rates in the country affects, other things being equal, on the international movement of capital, primarily short-term. An increase in the interest rate stimulates the inflow of foreign capital, while its decrease encourages the outflow of capital, including national, abroad. Second, interest rates affect the operations of foreign exchange and debt markets.

5. Activity of foreign exchange markets and speculative foreign exchange transactions. If the rate of any currency tends to decline, then firms and banks sell it in advance for more stable currencies, which worsens the position of the weakened currency. Foreign exchange markets react quickly to changes in the economy and politics, to fluctuations in exchange rates. Thus, they expand the possibilities of currency speculation and the spontaneous movement of "hot" money.

6. The degree of use of a certain currency in the European market and in international settlements. For example, the fact that 60-70% of Eurobank's operations are carried out in dollars determines the scale of demand for this currency and its supply. The rate of the currency is also influenced by the degree of its use in international settlements.

7. The degree of confidence in the currency in the national and world markets. It is determined by the state of the economy and the political situation in the country, as well as by the factors discussed above that affect the exchange rate, and dealers take into account not only the rate of economic growth, inflation, the level of purchasing power of the currency, the ratio of supply and demand of currency, but also the prospects for their dynamics.

8. Exchange rate policy. The ratio of market and government regulation of the exchange rate affects its dynamics. The formation of the exchange rate in the foreign exchange markets through the mechanism of supply and demand of currency, as a rule, is accompanied by sharp fluctuations in exchange rate ratios. The real exchange rate is formed on the market - an indicator of the state of the economy, money circulation, finance, credit and the degree of confidence in a particular currency. State regulation of the exchange rate is aimed at increasing or decreasing it based on the tasks of monetary and economic policy.

9. The degree of development of the stock market, which is a competitor to the foreign exchange market. The stock market can attract foreign currency directly, as well as "pull" funds in the national currency, which could be used in the foreign exchange market to buy foreign currency.

Currency regulation policy during the period of the currency and financial crisis

The reasons for the emergence of a currency crisis within a particular state are considered to be the conduct of an inadequate currency regulation policy, in particular, an inadequate exchange rate regime and insufficient measures to equalize the balance of payments, as well as the consequences of currency crises in other countries with economic ties with this country. In the situation of the monetary and financial crisis in Ukraine, both of these reasons can be noted. For a long time, the artificially maintained balance of the financial market in Ukraine was destroyed by the influence of the financial crisis in Russia.

The instability of exchange rates, aggravating the development of crises, historically led to the development of various theories of the exchange rate, which tried to determine the factors that most strongly affect the change in the exchange rate and develop measures to regulate it: the theory of purchasing power parity, the theory of regulated currency, the theory of the key currency, the theory of currency stability based on fixed parities and rates, the theory of floating exchange rates, the theory of optimal currency zones, the normative theory of the exchange rate. To analyze the currency regulation policy currently used in Ukraine, you can use the criteria and tools that were described by these theories.

The theory of purchasing power parity (D. Hume, D. Ricardo) explained the change in the exchange rate by the ratio of the amount of money in circulation of the respective countries, denying the objective cost basis of the exchange rate.

The theory of regulated currency had two directions: the theory of movable parities (I. Fisher, J.M. Keynes) and the theory of equilibrium rates. The theory of moving parities assumed the impact on the exchange rate by controlling the gold parity of the monetary unit. Keynes recommended depreciation of the national currency in order to influence prices, exports, production and employment in the country, to fight for foreign markets. These guidelines were used by Great Britain and other countries in the 30s. The theory of equilibrium rates assumed that the equilibrium point is such a rate that ensures an equilibrium of the balance of payments. Keynes believed that exchange rates that satisfy the principle of equilibrium should ensure a balance of the balance of payments for current operations and capital flows, and a normal level of employment.

The theory of key currencies (A. Hansen, F. Graham and others) proved the necessity and inevitability of dividing currencies into key, hard and soft; the need to orient the monetary policy of all countries with market economies to the dollar and to support it as a reserve currency, even if this is contrary to national interests.

The theory of currency stability based on fixed parities (J. Robinson, J. Bickerdike and others) recommended a regime of fixed parities and rates, allowing them to change only with a significant imbalance in the balance of payments. Based on economic and mathematical models, the supporters of this theory came to the conclusion that changes in the exchange rate are an ineffective means of regulating the balance of payments due to the insufficient response of foreign trade to price fluctuations in world markets depending on exchange rate ratios.

The theory of floating exchange rates (M. Friedman, A. Lindbeck, G. Johnson) substantiated the necessity and advantages of a floating exchange rate regime in comparison with fixed rates, based on the proposition of the relationship between three economic indicators - money supply, prices and capacity utilization, as well as on the denial of strict state regulation of the economy, including these parameters. M. Friedman proposed to legally prohibit currency intervention, believing that the market will do the job of currency speculators much better than the government. Supporters of the neoclassical direction consider it possible to stabilize the economy by strengthening market factors in the formation of the exchange rate and turning floating rates into an automatic regulator of international settlements.

The theory of optimal currency zones (R. Mundell, A. Collery) developed criteria for establishing real exchange rates, trying to find objective indicators that determine the need and extent of their change.

The normative theory of exchange rates (J. Mead) considered the exchange rate as an additional tool for regulating the economy, recommending the use of a flexible exchange rate regime controlled by the state. The authors of the theory believe that the exchange rate should be based on parities and agreements established by international bodies.

Despite the fact that individually each of the theories described above does not take into account all the factors affecting the exchange rate, in general they give an idea of ​​the possible directions of monetary policy, which may be more or less adequate in a particular financial situation.

Throughout 1997, a stable rate of 1.8-1.9 hryvnia per US dollar was kept in Ukraine. However, this apparent stability was not a consequence of the real stabilization of the economy, but was the result of measures taken by the government aimed at artificially maintaining the exchange rate. The need for such stability was explained by the government's desire to receive loans from the IMF and the world bank, which depended on the fulfillment of certain IMF requirements for domestic economic indicators. To maintain a stable hryvnia exchange rate during the year, the foreign exchange reserves of the National Bank of Ukraine, which at that time amounted to $ 2.3 billion, were thrown onto the Ukrainian Interbank Currency Exchange. By the end of 1998, as a result of the constant excess of demand, US dollars over supply, which was covered by foreign exchange reserves, reduced them to $ 0.8 billion. It should be noted that the NBU's foreign exchange reserve included, for the most part, funds received on credit from the IMF.

Many economists and politicians spoke about the inexpediency of maintaining the exchange rate at an unreasonably low level at the beginning of 1997, suggesting at that time to maintain the NBU rate at a higher level of 2 - 2.1 hryvnia per US dollar. Such a policy would save a significant portion of foreign exchange reserves. However, many economic indicators controlled by the International Monetary Fund were calculated taking into account the US dollar exchange rate, which required the government to pay special attention to this issue. At the same time, there was another point of view that one should not try to contain any unrealistic economic indicators at all costs, as this leads to an imbalance in the national economic system, which, as a result, causes greater losses on a national scale than the expected support of the International Monetary Fund.

However, at that time it was expected that the IMF would soon make a decision on a new tranche of loans, which would allow the government to take control of the economy into its own hands. When it became clear that the decision on the allocation of a tranche of loans by the International Monetary Fund would not be made in the near future, 63% of foreign exchange reserves of the volume at the beginning of 1997 had already been spent. Further maintenance of the hryvnia exchange rate within the established corridor was clearly impossible with the growing demand for dollars.

During the crisis in August 1998, the National Bank of Ukraine established a new currency corridor, the task of which, despite the growing concern, was to create certain guarantees of stability, which at that moment was a guarantee that the situation in the financial market would not finally get out of control. government. The decision on the new corridor was aimed at providing guarantees to investors, which is an important factor influencing the IMF's decision to grant a loan. However, even the introduction of a new corridor with a rather low upper limit led to a sharp reduction in the already depleted reserves of the National Bank. It became obvious that the reserves would not be enough to further maintain the exchange rate. Therefore, the government decided to take additional financial and administrative measures: the mandatory sale of foreign exchange earnings and a complicated procedure for buying foreign exchange on the stock exchange.

Mandatory sale of foreign currency led to a decrease in exports due to a decrease in profits from export sales. The decline in exports, in turn, led to a decrease in the supply of foreign currency on the interbank currency exchange, and also created a tendency for capital outflow, which resulted in a further drop in the exchange rate of the national currency. Thus, the introduction of a mandatory sale, the purpose of which was to replenish the foreign exchange reserves of the National Bank of Ukraine with a significant difference between the official and real US dollar exchange rates, created the effect of slowing down exports and reducing the inflow of dollars to Ukraine.

New requirements for the purchase of foreign exchange have significantly reduced the demand for foreign exchange. Thus, the registration of transactions with the tax inspectorate reduced the purchase of foreign currency through fictitious transactions, which were used to outflow capital abroad, and apparently constituted a significant part of the currency purchased on the exchange. The ban on prepayment purchases of foreign currency has reduced the total number of actual import contracts concluded. Such regulations created serious difficulties for importing enterprises, which in certain cases were forced to cease their import activities.

Thus, the measures carried out by the National Bank of Ukraine led to a decrease in the volume of not only exports, but also imports, in order to create the illusion of stabilization of the exchange rate near the upper border of the currency corridor. The losses from the introduction of such measures also consisted in the reduction of future tax payments to the budget from the reduced export-import activities of enterprises.

To reduce the demand for foreign exchange on the part of importers who are trying to benefit from early purchases of foreign currency to pay for import contracts, it was possible to use a less stringent measure, compared to a complete ban on prepayment, such as reducing the delivery time of goods for import, for example, to 30 days. , which was previously used during currency crises in other countries.

It should also be noted that a currency band is usually introduced in a situation when the exchange rate fluctuates around a certain mark. The purpose of the introduction of the currency band is to reduce the currency risks of market participants by narrowing the limits of exchange rate fluctuations. Moreover, with this behavior of the exchange rate, foreign exchange reserves are spent when there is resistance to the movement of the exchange rate to the upper border of the corridor and are acquired when there is resistance to the movement to the lower border.

The introduction of a corridor with a constant desire for the exchange rate to go beyond the upper limit is an inappropriate means that leads to the waste of foreign exchange reserves. In a crisis situation at the end of 1998 in Ukraine, a more appropriate measure, most likely, would be the introduction of a rate growth limit for the trading period, which was previously used at the UICE.

After the introduction of the exchange rate band, the official rate very quickly reached its upper limit and, due to a clear excess of demand over supply, the exchange rate band turned into an almost fixed exchange rate, with the ensuing consequences, such as:

The emergence of a black market for currencies;

The disappearance of the mechanism for determining the real price of the national currency, which undermines the basic principles of a market economy and makes the economy non-transparent;

Reduction of investments and financial assistance from foreign states;

Another negative consequence of the currency corridor is discrimination against commercial banks: the currency corridor gives banks close to the National Bank the opportunity to purchase currency on the stock exchange as a priority and allows them to gain additional benefits by reselling it at a higher rate. This situation also undermines healthy competition in the banking sector, creates a threat of bankruptcy for most of the remaining banks, due to the fact that bank customers want to be able to buy currency on the exchange in a normal and timely manner, switching to services in “close” banks. In addition, since the beginning of the crisis, banks were prohibited from having an open foreign exchange position, which reduces their financial stability and, with such a depreciation of the hryvnia, increases the foreign exchange risk for banks.

The lack of a developed forward currency market in Ukraine exacerbated the impact of the crisis on exporters. The positive effect of the forward market would be to separate the speculative demand for the currency, which arose due to the expectation of further appreciation of the exchange rate, from the demand for completed exports. Exporters could reduce the risk of losses in the event of a fall in the exchange rate by buying futures contracts for the purchase of foreign currency from the state or importers, and although in such a crisis this would not protect them at all from losses, to a certain extent it would reduce them, especially since on the forward market they can be insured and share currency risks between importers, exporters and the state.

At the moment, with the introduction of the new European currency "euro", Ukraine needs to consider the issue of further orienting the monetary policy towards the "euro". Subject to further integration with the European community, according to many economists, this will provide a good objective basis not only for calculating the exchange rate of the national currency, but also for Ukraine's successful entry into the European markets for goods and services. This is due to the fact that the tendencies of the European financial market are closer to the economic situation in Ukraine, as well as a large share of Ukraine's trade with European states in the total trade of Ukraine.

Currency crises similar to the monetary and financial crisis in Ukraine experienced many former socialist countries, however, their economies suffered from them to a lesser extent, thanks to the fact that the government was not afraid to go forward with radical reforms, economic liberalization, creation of a normal environment for entrepreneurship. realizing that success in combating the crisis lies primarily in ensuring the stable operation of enterprises during this period of time, and not limiting their work by all kinds of measures in order to create illusions of any economic stabilization, which subsequently bring greater damage than could have caused the crisis itself.

Taking in a situation of aggravation of the crisis a number of seemingly less significant measures and at the same time without delaying the adoption of serious political decisions, it is possible to achieve a greater effect by preserving the economic potential of enterprises and trust in the government than from serious measures that are saving the government at the moment , however, in the future they destroy the economic environment in the state.

The question is how to analyze the fall and rise of the currency, is relevant for every trader who wants to trade successfully, concluding profitable trades based on correct predictions about the future movement of the value of the traded asset.

Forex trading uses two types of analysis price changes:

• and fundamental.

The first one aims to determine the patterns of value movement and identify a certain cyclicality in order to build reliable forecasts regarding future movements on the basis of past data.

Also, noticeable shocks, cataclysms, catastrophes, etc. also strongly affect the dynamics (most often, the fall in the exchange rate).

Analysis of price changes

Considering what determines the growth and decline, the rate of movement of indicators in Forex, it is worth emphasizing that the most important are the indicators of the United States and the European Union as countries whose national financial instruments are the euro and the dollar. The economic indicators and policies of the Central Banks of these states directly affect the changes in the exchange rates and the balance of these assets and indirectly - on others.

When analyzing commodity currencies, it is worth taking into account changes in the prices of oil and other goods, resources and the price of their exports, which determine the development of the economies of states. Political events matter - crises, periods of uncertainty, which largely affects the exchange rate of the national currency.

Analyzing what is the reason for the growth of a financial instrument, one should not ignore the ratio of supply and demand in the Forex market. But the effect of the actions of the participants in the trades is short-lived and quickly leveled out, it appears only if the sums of the conclusion of transactions are huge. Often in this way, National Banks control and raise / lower the rate, buying up or throwing into the market large amounts of assets.

You can view macroeconomic statistics, times and dates of publication in, which is usually published in the public domain.

According to the degree of importance, they usually distinguish:

• Important news - those, the expectation and publication of which cause excitement and strong jumps in quotations
• The middle level is minor, which indirectly affect the state of the market
• Low impact - metrics that don't move the market at all

You can see how and how certain news affects a particular currency in the economic calendar and on historical data. There are whole strategies based on the conclusion of deals at certain points. Here it is worth considering both the news itself and the forecasts. If the actual values ​​turned out to be better than expected, the optimism of investors increases and there is an increase in the currency to which the news is concerned, if the data is worse, they pressurize and it may decline.

To obtain the most reliable data, it is necessary to first analyze the financial instrument itself and determine the factors on which the change in value depends - this can be both the inflation rate and the demand for oil. Then it is advisable to view the historical data and analyze the price movement, try to determine what caused the strong jumps, at what moments there were sharp changes, and when - stability. In this case, it will be possible to clearly understand what data should be monitored for making adequate forecasts.

Let's consider the main reasons for changes in exchange rates. First of all, the dynamics of the exchange rate is determined in the long term by changes in the purchasing power of currencies, that is, by shifts in the ratios of prices of the same "baskets" of goods in the domestic markets.
Suppose (arbitrary numbers) that the exchange rate of 1 dollar is 2 German marks. A computer in the United States costs $ 1,500, and a similar computer in Germany, which previously cost 3,000 German marks, has risen in price by 1 thousand marks due to inflation. Then it will be profitable to export computers from the USA to Germany. By buying a computer in the United States for $ 1,500 and selling it for 4,000 marks, these brands can be converted into $ 2,000. If such operations are profitable, then many will want to do them. To do this, they will buy dollars in the foreign exchange market to purchase computers in the United States. This will lead to an increase in demand for the dollar and raise its rate - say, up to 4 German marks for 1 dollar. But then it will become profitable to export a computer from Germany. By purchasing it for 4,000 marks and selling it for $ 1,500 in the United States, you can exchange $ 1,500 for 6,000 marks. This will cause an increase in demand for stamps and a drop in the dollar. The equilibrium in the market, obviously, will be restored at the rate of 1 dollar = 2.66 (= 4000/1500) marks. This course will reflect the new price ratios for computers.
Such an equalization mechanism does not always work and not for all goods, but taking into account the prices of similar consumer “baskets”, the purchasing power parity of currencies can be calculated.
Thus, we can conclude that the exchange rate depends on the inflation rate in the country. All other things being equal, an increase in domestic prices leads to a fall in the exchange rate.
The dynamics of the exchange rate is determined by changes in the dynamics of the country's exports and imports. For example, the greater the export, the greater the demand abroad for the currency of this country to pay for exports and the higher its rate. The growth of imports as a result of growing incomes of the population causes an increase in demand for foreign currency to pay for imported purchases and a weakening of the national currency.
However, it is important to consider. price elasticity of demand for imported goods. If the exchange rate of 1 dollar rose from 1.5 to 1.6 Deutsche Marks, then a German product with a price of 45 marks began to cost not 30, but 28.1 dollars. This stimulates, with elastic demand, an increase in the supply of dollars for exchange for marks and a fall in the dollar exchange rate. But if the demand for German goods in the United States is inelastic in price and has grown from only 100 to 105 units. per week, the income of German exporters will decrease from 3000 (= 30 x South Ossetia) to $ 295.05 (= 28.1 x 105) dollars. This will lead to a drop in demand for the brand and to a decrease in its rate.
Differences in interest rates are also an important factor in determining the exchange rate. If the income on a deposit in dollars is 6% per annum, and on a deposit in Deutsche Marks 5% per annum, then the owners of the stamps will want to convert them into dollars in order to put them on an account in an American bank. This will increase the demand for dollars and the dollar against the mark. For example, if a US bank takes a loan in marks at 5% per annum, converts marks into dollars and places them in an account at 6% per annum, its additional income will be 1% per annum. When the loan matures, dollars will be sold for marks. This procedure is called currency interest arbitration.
The change in rates, in turn, is a consequence of the action of monetary factors. The monetary approach postulates that interest rates change in the process of balancing money supply and demand. As we saw earlier, the supply of money is set by the Central Bank, and the demand for it directly depends on real incomes, the price level, and inversely depends on the level of interest rates. The higher the rates, the more expedient it is to store wealth in income-generating securities. Given real income and prices, the equilibrium rate is determined at the intersection of the money supply and demand curves. An increase in the supply of money and a decrease in rates lead to an increase in the demand for foreign currency for depositing it abroad, that is, to an outflow of capital abroad, and a depreciation of the national currency.
The exchange rate is also influenced by the expectations of the owners of money regarding the dynamics of the exchange rate in the future. People will strive to get rid of a currency that is weakened and, by

their opinion will be cheaper. As a result, under the influence of changes in supply and demand, the positions of the weakened currency will deteriorate. Thus, the degree of confidence in the currency and its international status play an important role.

Exchange rate- the expression of the price of the monetary unit of one country in the monetary units of another.

Establishing an exchange rate by assessing a foreign currency in the national currency is called a direct quotation. The reverse quote represents the price of the national currency in foreign currency (1 ruble = 0.035 USD).

Classification of types of exchange rates:

I. By type of transaction:

a ) urgent- is used when concluding fixed-term foreign exchange contracts;

b) SPOT course- short-term exchange rate at a given time.

II. For inflation accounting:

a) nominal- the exchange rate of currencies currently in force on the foreign exchange market of the country;

b) real- is calculated as the ratio of the prices of goods of the two countries, taken in the respective currency.

III. In relation to the participants in the transaction:

a) course purchases;

b) course sales.

IV. By way of sale:

a) course cash sales;

b) course cashless sales.

V. By the method of establishing:

a ) official;

b) informal(market).

According to the IMF classification, a country can choose the following exchange rate regimes :

1) Fixed ... The exchange rate of the national currency is fixed in relation to one voluntarily chosen currency and automatically changes in the same proportions as the base rate; or fixed to SDR; or a "basket" exchange rate is set. In this case, the rate of the national currency is tied to a currency combination that includes the currencies of the main trading partners of a given country.

2) Free floating ... As a rule, it does not occur in its pure form, since the Central Banks conduct foreign exchange interventions in order to prevent sharp significant fluctuations in the national currency rate.

3) Mixed ... This is the so-called group voyage, when countries unite into a common monetary union and establish two exchange rate regimes: internal - for transactions within the union; external - for operations with other countries. For example, OPEC countries have linked their rates to oil prices.

Factors affecting the value of the exchange rate are divided into structural (acting in the long term) and conjuncture (causing short-term fluctuations in the exchange rate).

TO structural factors relate:

The state of the country's balance of payments;

The purchasing power of monetary units and inflation is dark;

Difference in interest rates in different countries;

State regulation of the exchange rate;

The degree of openness of the economy.

Market factors associated with fluctuations in business activity in the country, the political environment, rumors and forecasts, such as:

· Demand and supply in the foreign exchange market;

· Crises, wars, natural disasters;

· Forecasts and expectations of foreign exchange market participants;

· The cyclical nature of business activity in the country.

Let us consider in more detail the mechanism of influence of the main factors on the value of the exchange rate.

What does the exchange rate depend on? It is impossible to answer this question unequivocally, but the fact that it is determined by the market is an axiom. And yet, what factors influence changes in currency quotes? There are several of them. First of all, this is the ratio of imports and exports. Everything is very simple, if the price of a product in the domestic market is much higher than in the foreign market, then this will lead to an increase in imports and, accordingly, to a decrease in exports. This fact is called the "purchasing power parity" of the exchange rate. What is meant by this concept? This is an indicator that shows how the ratio of prices for goods in the domestic and foreign markets of two countries affects the ratio of the rates of their currencies. We can say that currency changes are directly proportional to price changes. This can be seen in a simple example. If one of the countries increases imports, then the price of foreign currency also increases.

And one more important factor. The growth of imports always precedes the growth of national income. In turn, with its increase, the price of the national currency falls. A similar situation is observed in the financial market. The more investors contribute to the shares of foreign companies, the higher the price of foreign currency.

If one of the countries pays for the services of another state, then its currency increases in value. This factor is the basis for the speculative operations of traders in the foreign exchange market. As soon as the currency falls in price, they try to get rid of it. The massive release of funds into the market provokes an even greater fall in prices. In addition, the fall in the exchange rate is due to the news. They can be directly related to politics, natural disasters, financial shocks, etc. All this leads to a sharp movement of capital in one direction, which in turn leads to a sharp change in the exchange rate.

This kind of movement can be caused not by the news itself, but by their anticipation. As an example, we can cite the expectation of the publication of economic indicators of those countries whose currencies are represented on the foreign exchange market. Also, a sharp jump in the currency can be caused by changes in the interest rate, which is sometimes used by market regulators.

All new economic indicators are published in the economic calendar, the date of which is known in advance. It is quite understandable that the market is also preparing for such an event, reacting to it with changes in exchange rates. Traders prefer to wait out this period and not enter the market, as it is rather difficult to predict its behavior at this moment. However, there is a special trading strategy called “news trading”. Based on it, you can make forecasts that allow you to determine the direction of the trend and make appropriate adjustments to it.

For example, we expect the US dollar to rise. This will happen in a month, but you need to buy the dollar now. After the news is released and the trend is corrected, the dollar can be sold, making money on the difference in currencies.

In addition to the above factors, the movement of the exchange rate is influenced by the activities of investment and insurance funds. Having huge funds, they can invest in currency, which leads to a sharp change in the exchange rate. In this case, it is important for a trader to anticipate events and open a position in time in the direction of the trend movement.

Once again, we draw your attention to the fact that significant changes in the foreign exchange market can be caused by: the statements of politicians, the activities of importers and exporters, various forecasts and even rumors, the actions of central banks carrying out foreign exchange interventions, the inflation rate, the merger of banks, the devaluation of the national currency. What is important for a trader is to understand the essence of what is happening and, on the basis of this, make correct predictions that allow for successful trading.