Exchange rates

The agenda
.
Concept of exchange rates
History of the exchange rate
Characteristics of the old exchange rates
Exchange rates now
Disadvantages of the modern exchange rates
The purpose of the exchange rates
Conclusion

An exchange rate is the price at which one currency can be exchanged for another (e.g. how many euros are needed to buy a pound).
What is it exchange rate?

After world war II, the levels of most major currencies were again fixed
to the us dollar, and it to gold.
This system ended in 1971
because after inflation in the
USA did not have enough gold to guarantee its currency.
History of the exchange rates

the ability to exchange dollars for gold and Vice versa
Fixed exchange rates can only be adjusted with the consent of the International Monetary Fund.
Features

Exchange rates now
Now there has been a system of floating exchange rates. Exchange rates are determined by supply and demand the quantities of currencies bought and sold in the foreign exchange markets

Drawback of this system
The main drawback of this system is speculation. Governments and central banks sometimes try to change the value of their currency. They intervene in the foreign exchange markets, using their foreign exchange reserves to raise or lower the value of the currency.

Exchange rates are necessary for international trade. They help a person travel from one country to any other country using a different currency.
Why do we need exchange rates?

Conclusion
In our time, money is not provided with gold and exchange rates are created artificially.