Main factors influencing the exchange rate. Factors of changes in exchange rates

The development of foreign economic relations requires a special tool through which entities operating in the international market could maintain close financial interaction with each other. Such a tool is banking operations for exchanging foreign currency. The most important element in the system of banking transactions with foreign currency is the exchange rate, because the development of international economic relations requires measuring the value of currencies different countries.

The exchange rate is required for:

mutual exchange of currencies in the trade of goods, services, and in the movement of capital and loans. The exporter exchanges the proceeds of foreign currency for national currency, since the currencies of other countries cannot circulate as a legal means of purchase and payment in the territory of a given state. The importer exchanges national currency for foreign currency to pay for goods purchased abroad. The debtor purchases foreign currency for national currency to repay debt and pay interest on external loans;

comparison of prices on world and national markets, as well as cost indicators different countries, expressed in national or foreign currencies;

periodic revaluation of foreign currency accounts of companies and banks.

EXCHANGE RATE: DEFINITION, CLASSIFICATION, METHODS OF ESTABLISHMENT

Exchange rate is the exchange ratio between two currencies, for example 100 yen per 1 US dollar or 27 Russian rubles per 1 US dollar.

Hypothetically, there are five exchange rate systems:

Free (“clean”) swimming;

Guided swimming;

Fixed rates;

Target zones;

Hybrid exchange rate system.

Thus, in a free floating system, the exchange rate is formed under the influence of market demand and supply. At the same time, the foreign exchange forex market is closest to the model of a perfect market: the number of participants, both on the demand side and on the supply side, is huge, any information is transmitted in the system instantly and is available to all market participants, the distorting role of central banks is insignificant and inconsistent.

In a managed floating system, in addition to supply and demand, the exchange rate is strongly influenced by the central banks of countries, as well as various temporary market distortions.

An example of a fixed exchange rate system is the Bretton-Woods currency system of 1944-1971.

The target zone system develops the idea of ​​fixed exchange rates. An example of this is fixation Russian ruble to the US dollar in the corridor of 5.6-6.2 rubles per 1 US dollar (in pre-crisis times). In addition, the mode of functioning of the exchange rates of the participating countries of the European Monetary System can be attributed to this type.

Finally, an example of a hybrid exchange rate system is the modern currency system, in which there are countries that freely float the exchange rate, there are zones of stability, etc. Detailed listing of exchange rate regimes various countries currently in force can be found, for example, in IMF publications.

Many exchange rates can be classified according to various criteria:

Classification of types of exchange rates.

One of the most important concepts used in the foreign exchange market is the concept of real and nominal exchange rates.

Real exchange rate can be defined as the ratio of the prices of goods of two countries, taken in the corresponding currency.

Nominal exchange rate shows the exchange rate currently in effect at foreign exchange market countries.

Exchange rate maintaining constant purchasing power parity: This is the nominal exchange rate at which the real exchange rate remains unchanged.

In addition to the real exchange rate, calculated on the basis of the price ratio, you can use the same indicator, but with a different base. For example, taking it as the ratio of labor costs in two countries.

The exchange rate of the national currency may change differently in relation to different currencies over time. Thus, it can fall in relation to strong currencies, and rise in relation to weak currencies. That is why, to determine the dynamics of the exchange rate as a whole, the exchange rate index is calculated. When calculating it, each currency receives its weight depending on the share of foreign economic transactions of a given country that accounts for it. The sum of all weights is one (100%). Exchange rates are multiplied by their weights, then all the resulting values ​​are summed up and their average value is taken.

In modern conditions, the exchange rate is formed, like any market price, under the influence of supply and demand. Balancing the latter in the foreign exchange market leads to the establishment of an equilibrium level of the market exchange rate. This is the so-called “fundamental equilibrium”.

The size of the demand for foreign currency is determined by the country's needs for the import of goods and services, the expenses of tourists of a given country traveling to foreign countries, the demand for foreign financial assets and the demand for foreign currency in connection with the intentions of residents to carry out investment projects abroad.

The higher the foreign currency exchange rate, the less demand for it; The lower the rate of foreign currency, the greater the demand for it.

The size of the supply of foreign currency is determined by the demand of residents of a foreign state for the currency of a given state, the demand of foreign tourists for services in a given state, the demand of foreign investors for assets denominated in the national currency of a given state, and the demand for the national currency in connection with the intentions of non-residents to carry out investment projects in this state.

Thus, the higher the exchange rate of a foreign currency in relation to the domestic one, the smaller the number of national subjects of the foreign exchange market is ready to offer domestic currency in exchange for foreign currency and vice versa, the lower the rate of the national currency in relation to the foreign currency, the greater the number of subjects of the national market are ready to purchase foreign currency.

FACTORS AFFECTING THE EXCHANGE RATE.

Like any price, the exchange rate deviates from the value basis - the purchasing power of currencies - under the influence of supply and demand for the currency. The ratio of such supply and demand depends on a number of factors. The multifactorial nature of the exchange rate reflects its relationship with other economic categories - value, price, money, interest, balance of payments, etc. Moreover, there is a complex interweaving of them and the promotion of some or other factors as decisive.

Factors influencing the exchange rate are divided into structural (acting in the long term) and market factors (causing short-term fluctuations in the exchange rate).

Structural factors include:

Competitiveness of the country's goods on the world market and its changes;

The state of the country's balance of payments;

Purchasing power of monetary units and inflation rates;

Difference in % rates in different countries;

State regulation of the exchange rate;

The degree of openness of the economy.

Market factors are associated with fluctuations in business activity in the country, political situation, rumors and forecasts.

These include:

Activities of foreign exchange markets;

Speculative currency transactions;

Crises, wars, natural disasters;

Forecasts;

The cyclical nature of business activity in the country.

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

INFLATION RATE AND EXCHANGE RATE:

The exchange rate is affected by the rate of inflation. The higher the inflation rate in a country, the lower the exchange rate of its currency, unless other factors counteract it. Inflationary depreciation of money in a country causes a decrease in purchasing power and a tendency for its exchange rate to fall against the currencies of countries where the inflation rate is lower. This trend is usually observed in the medium and long term. The equalization of the exchange rate, bringing it into line with purchasing power parity, occurs on average within two years.

The dependence of the exchange rate on the inflation rate is especially high in countries with a large volume of international exchange of goods, services and capital.

PAYMENT BALANCE STATUS:

The balance of payments directly affects the exchange rate. An active balance of payments contributes to the appreciation of the national currency, as the demand for it from foreign debtors increases. The passive balance of payments creates a tendency for the national currency to depreciate, because debtors sell it for foreign currency to pay off their external obligations. The size of the influence of the balance of payments on the exchange rate is determined by the degree of openness of the country's economy. Thus, the higher the share of exports in GNP (the higher the openness of the economy), the higher the elasticity of the exchange rate with respect to changes in the balance of payments. The instability of the balance of payments leads to abrupt changes in the demand for the corresponding currencies and their supply.

In addition, the exchange rate is influenced by the economic policy of the state in the field of regulation components balance of payments: current account and capital account. When a positive trade balance increases, the demand for the currency of a given country increases, which contributes to an increase in its exchange rate, and when a negative balance appears, the opposite process occurs. Changes in the balance of capital movements have a certain impact on the exchange rate of the national currency, which is similar in sign (“plus” or “minus”) to the trade balance. However, there is also a negative impact of excessive inflows of short-term capital into a country on the exchange rate of its currency, because it can increase the excess money supply, which in turn can lead to higher prices and currency depreciation.

NATIONAL INCOME AND EXCHANGE RATE:

National income is not an independent component that can change on its own. However, in general, those factors that cause national income to change have a large impact on the exchange rate. Thus, an increase in the supply of products increases the exchange rate, and an increase in domestic demand lowers its exchange rate. In the long run, a higher national income means a higher value of a country's currency. The trend is reversed when considering the short-term time interval of the impact of increasing household income on the exchange rate.

DIFFERENCE IN INTEREST RATES IN DIFFERENT COUNTRIES:

The influence of this factor on the exchange rate is explained by two main circumstances. First, change interest rates in the country affects, other things being equal, on international movement capital, especially short-term. In principle, an increase in the interest rate stimulates the influx of foreign capital, and a decrease in it encourages the outflow of capital, including national capital, abroad. Second, interest rates affect the operations of foreign exchange and capital markets. When conducting transactions, banks take into account the difference between % and x. rates on national and global capital markets in order to make profits. They prefer to obtain cheaper loans in foreign capital markets, where interest rates are lower, and place foreign currency in the domestic loan market, where interest rates are lower.

ACTIVITY OF CURRENCY MARKETS AND SPECULATIVE CURRENCY OPERATIONS:

If the exchange rate of a currency tends to fall, then firms and banks sell it in advance for more stable currencies, which worsens the position of the weakened currency. Foreign exchange markets quickly respond to changes in the economy and politics, and to fluctuations in exchange rates. Thus, they expand the possibilities of currency speculation and the spontaneous movement of “hot” money.

DEGREE OF USE OF A CERTAIN CURRENCY IN THE EUROMARKET AND IN INTERNATIONAL SETTLEMENTS:

For example, the fact that 60-70% of European banks' transactions are carried out in dollars determines the scale of supply and demand for this currency. The exchange rate is also affected by the degree of its use in international payments.

ACCELERATION OR DELAY OF INTERNATIONAL PAYMENTS:

In anticipation of a depreciation of the national currency, importers seek to speed up payments to counterparties in foreign currency so as not to incur losses when its exchange rate increases. When the national currency strengthens, on the contrary, their desire to delay payments in foreign currency prevails. This tactic, called “leads and leggs,” affects the balance of payments and the exchange rate.

DEGREE OF CONFIDENCE IN 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 the factors discussed above that affect the exchange rate. Moreover, dealers take into account not only the given rates of economic growth, inflation, the level of purchasing power of the currency, but also the prospects for their dynamics. Sometimes even waiting for the release of official data on the balance of trade, balance of payments or election results affects the supply and demand relationship and the exchange rate.

CURRENCY POLICY:

The relationship between market and government regulation of the exchange rate affects its dynamics. The formation of the exchange rate in foreign exchange markets through the mechanism of supply and demand for currency is usually accompanied by sharp fluctuations in exchange rates. The real exchange rate is formed on the market - an indicator of the state of the economy, monetary 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 monetary and economic policy. For this purpose, a certain monetary policy is being pursued.

Finally, the exchange rate of the national currency is also significantly affected by SEASONAL PEAKERS AND DOWNS IN BUSINESS ACTIVITY IN THE COUNTRY. Numerous examples demonstrate this. Thus, at the end of December 1996, trading volumes on the Moscow Interbank Currency Exchange increased every trading day. The reason for the active purchase was the upcoming long break in trading on the foreign exchange market associated with the New Year holidays.

Thus, exchange rate formation– a complex multifactorial process caused by the interrelation of national and world economies and politics. Therefore, when forecasting the exchange rate, the considered exchange rate-forming factors and their ambiguous influence on the exchange rate depending on the specific situation are taken into account.

REGULATION OF THE EXCHANGE RATE.

There is market and government regulation of the exchange rate. Market regulation, based on competition and the laws of value, as well as supply and demand, is carried out spontaneously. State regulation is aimed at overcoming the negative consequences of market regulation of foreign exchange relations and at achieving sustainable economic growth, balance of payments equilibrium, reducing the growth of unemployment and inflation in the country. It is carried out using monetary policy– a set of measures in the field of international monetary relations, implemented in accordance with the current and strategic goals of the country. Legally, monetary policy is formalized by currency legislation and currency agreements between states.

Measures of government influence on the exchange rate include:

A) foreign exchange interventions;

B) discount policy;

B) protectionist measures.

The most important instrument of monetary policy of states is currency interventions – operations of central banks in foreign exchange markets for the purchase and sale of national monetary unit against leading foreign currencies.

The purpose of foreign exchange interventions is to change the level of the corresponding exchange rate, the balance of assets and liabilities for different currencies, or the expectations of foreign exchange market participants. The operation of the currency intervention mechanism is similar to the implementation of commodity interventions. In order to increase the exchange rate of the national currency, central bank must sell foreign currencies, buying up national ones. Thus, the demand for foreign currency decreases, and, consequently, the exchange rate of the national currency increases. In order to lower the exchange rate of the national currency, the central bank sells the national currency and buys foreign currency. This leads to an increase in the exchange rate of foreign currency and a decrease in the exchange rate of the national currency.

For interventions, as a rule, official foreign exchange reserves are used, and changes in their level can serve as an indicator of the scale of government intervention in the process of setting exchange rates.

Official interventions can be carried out in different ways - on exchanges (publicly) or in the interbank market (privately), through brokers or directly through transactions with banks, for a period or with immediate execution.

In addition, official foreign exchange interventions are divided into “sterilized” and “unsterilized”. "Sterilized" are interventions during which changes in official foreign net assets are compensated by corresponding changes in domestic assets, i.e. there is virtually no impact on the size of the official “monetary base”. If a change in official foreign exchange reserves during an intervention leads to a change in the monetary base, then the intervention is "unsterilized".

In order for currency interventions to lead to the desired results in changing the national exchange rate in the long term, it is necessary:

Availability of the required amount of reserves in the central bank for foreign exchange interventions;

Confidence of market participants in the long-term policy of the central market;

Changes in fundamental economic indicators, such as the rate of economic growth, the rate of inflation, the rate of change in the increase in the money supply, etc.

Discount policy- this is a change by the central bank in the discount rate, including for the purpose of regulating the exchange rate by influencing the cost of credit in the domestic market and thereby affecting international capital flows. In recent decades, its importance for regulating the exchange rate has gradually decreased.

Protectionist measures- these are measures aimed at protecting one’s own economy, in this case the national currency. These include, first of all, currency restrictions. Currency restrictions– legislative or administrative prohibition or regulation of transactions of residents and non-residents with currency or other currency values. The types of currency restrictions are the following:

Currency blockade

Prohibition on free purchase and sale of foreign currency

Regulation of international payments, capital movements, repatriation of profits, movement of gold and valuable papers

Concentration of foreign currency and other currency values ​​in the hands of the state.

The state quite often manipulates the exchange rate in order to change the country's foreign trade conditions, using such methods of currency regulation as the double currency market, devaluation and revaluation.

INFLUENCE OF EXCHANGE RATE ON FOREIGN TRADE.

Exchange rates have a significant impact on the foreign trade of various countries, acting as an instrument of communication between the value indicators of the national and world markets, affecting the price ratios of exports and imports and causing changes in the internal economic situation, as well as changing the behavior of firms exporting or competing with imports.

Using the exchange rate, the entrepreneur compares his own production costs with world market prices. This makes it possible to identify the results of foreign economic operations of individual enterprises and the country as a whole. Based on exchange rate ratios, taking into account specific gravity of a given country in world trade, the effective exchange rate is calculated. The exchange rate has a certain impact on the ratio of export and import prices, the competitiveness of firms, and the profits of enterprises.

Sharp fluctuations in the exchange rate increase the instability of international economic, including monetary, credit and financial relations, causing negative socio-economic consequences, losses for some and gains for other countries.

In general, the depreciation of the national currency provides an opportunity for exporters of this country to lower prices for their products in foreign currency, receiving a premium when exchanging the proceeds of an increased foreign currency for a cheaper national currency and have the opportunity to sell goods at prices below the world average, which leads to their enrichment due to the material losses of their countries. Exporters increase their profits by exporting goods en masse. But at the same time, the depreciation of the national currency increases the cost of imports, since in order to receive the same amount in their own currency, foreign exporters are forced to increase prices, which stimulates an increase in prices in the country, a reduction in the import of goods and consumption, or the development of national production of goods to replace imported ones. A depreciation in the exchange rate reduces real debt in national currency and increases the severity of external debts denominated in foreign currency. It becomes unprofitable to export profits, interest, and dividends received by foreign investors in the currency of the host countries. These profits are reinvested or used to purchase goods at domestic prices and then export them.

When the currency appreciates, domestic prices become less competitive, export efficiency decreases, which can lead to a reduction in export industries and national production as a whole. Imports, on the contrary, are expanding. The influx of foreign and national capital into the country is being stimulated, and the export of profits from foreign investments is increasing. The real amount of external debt expressed in depreciated foreign currency decreases.

Many countries manipulate exchange rates to achieve their goals, both in the field of economic development and in the field of protection against exchange rate risk. Manipulation includes a whole range of activities - from artificially lowering or, conversely, overstating the exchange rates of national currencies, the use of tariffs and licenses, to the intervention mechanism.

An overvalued exchange rate of a national currency is an official exchange rate set at a level higher than the parity rate. In turn, an undervalued exchange rate is an official rate set below the parity rate.

The gap between external and internal currency depreciation, i.e. dynamics of its exchange rate and purchasing power, has important for foreign trade. If internal inflationary depreciation of money outstrips the depreciation of the currency, then other equal conditions The import of goods is encouraged for the purpose of selling them on the domestic market at high prices. If the external depreciation of a currency outpaces the internal one caused by inflation, then conditions arise for currency dumping - massive export of goods at prices below the world average, associated with the lag between the fall in the purchasing power of money and the fall in its exchange rate, in order to displace competitors in foreign markets.

Currency dumping is characterized by the following:

the exporter, buying goods on the domestic market at prices that have increased under the influence of inflation, sells them on the foreign market in a more stable currency at prices below the world average;

the source of the decline in export prices is the exchange rate difference that arises when exchanging the proceeds from a more stable foreign currency for a depreciated national one;

Export of goods on a mass scale provides super-profits for exporters.

The dumping price may be lower than the production price or cost. However, too low a price is not profitable for exporters, because Competition with national goods may arise as a result of their re-export by foreign counterparties.

Currency dumping, being a type of commodity dumping, differs from it, although they are united common feature– export of goods at low prices. But if, with commodity dumping, the difference between domestic and export prices is repaid mainly at the expense of the state budget, then with foreign exchange dumping, it is due to the export premium (exchange rate difference). Currency dumping first began to be practiced during the global economic crisis 1929-1933 Its immediate prerequisite was the uneven development of the global currency crisis. Great Britain, Germany, Japan, and the USA used the depreciation of their currencies to export junk goods.

Currency dumping exacerbates contradictions between countries, disrupts their traditional economic ties, and increases competition. In a country that carries out currency dumping, exporters' profits increase, and the living standards of workers decrease due to rising domestic prices. In a country that is the target of dumping, the development of economic sectors that cannot withstand competition with cheap foreign goods is hampered, and unemployment increases.

In 1967, at the General Agreement on Tariffs and Trade (GATT) conference, the international Anti-Dumping Code was adopted, providing for special sanctions for dumping, including currency dumping.

Sometimes different exchange rate regimes are established for different participants in the foreign exchange market, depending on the transactions being carried out: commercial or financial. Often the official exchange rate is used for commercial transactions, while the market rate is used for transactions involving capital movements. The commercial transactions rate is usually undervalued. Initially, countries that have artificially devalued their own currencies experience an economic recovery caused by increased export competitiveness. However, further restrictions on intra-industry and inter-industry redistribution of resources are increasing; most of the national income is directed to the production sector due to a decrease in the share of consumption in it, which leads to an increase in the level of consumer prices in the country, due to which the standard of living of workers deteriorates. The artificial maintenance of a constant exchange rate, the level of which significantly diverges from the parity level, can also have a negative impact on changes in the proportions of the national economy, leading to the consolidation of a one-sided orientation in the development of certain sectors of the economy.

Thus, changes in exchange rates affect the redistribution between countries of part of the total social product, which is sold on foreign markets. In conditions of floating exchange rates, the impact of exchange rates on pricing and the inflation process increases.

In the context of floating exchange rates, the impact of their changes on the movement of capital, especially short-term capital, has increased, which affects the monetary and economic situation of individual countries. As a result of the influx of speculative foreign capital into a country whose exchange rate is rising, the volume of loan capital and investment may temporarily increase, which is used to develop the economy and cover the state budget deficit. The outflow of capital from the country leads to a shortage of capital, a curtailment of investment, and an increase in unemployment.

The consequences of exchange rate fluctuations depend on the country’s monetary and economic potential, its export quota, and positions in the IEO. The exchange rate is the object of struggle between countries, national exporters and importers, and is a source of interstate disagreements. For this reason, exchange rate problems occupy a prominent place in economic science.

WESTERN THEORIES OF EXCHANGE RATE REGULATION.

Western theories of managed exchange rates serve two functions:

The first (ideological) is aimed at justifying the viability of a market economy;

The second (practical) is to develop methods for regulating the exchange rate as an integral part of monetary policy.

Most Western theories of exchange rates are characterized by a number of features:

denial of the theory of labor value, the cost basis of the exchange rate, the commodity nature of money;

exchange concept - exaggeration of the role of the sphere of circulation while underestimating production factors. The exchange concept is manifested in the elastic, absorbent, monetary approach of Western economists to the analysis of exchange rates;

combining the quantity and nominalist theories of money with the concepts of international equilibrium.

The basic tenet of the nominalistic theory of money (money is a creation of the state) is extended by economists to the exchange rate. In their opinion, the exchange rate does not have a cost basis, and currency parity is established by the state depending on its policy.

The founder of the state theory of money, the German economist G. Knapp, considered the exchange rate as a creation of the state, explaining its changes by the will of the government, denying the cost basis of exchange rate relations. Such a replacement of economic categories with legal ones results from the confusion of money with a monetary unit of account and the scale of prices.

THE THEORY OF PURCHASING POWER PARITY. (Look4) ) This theory is based on the nominalistic and quantity theories of money. Its origins originate from the views of the English economists D. Hume and D. Ricardo. The main provisions of this theory are the statement that the exchange rate is determined by the relative value of money in two countries, which depends on the price level, and the price level depends on the amount of money in circulation. This theory is aimed at finding an “equilibrium rate” that would maintain a balanced balance of payments. This determines its connection with the concept of automatic self-regulation of the balance of payments.

The theory of purchasing power parity, while recognizing the real basis of exchange rates - purchasing power, denies its cost basis, exaggerates the role of spontaneous market factors and underestimates government methods of regulating exchange rates and the balance of payments. The lack of integrity of this theory contributes to its periodic revival. It has become an integral element of monetarism, whose supporters exaggerate the role of changes in the money supply in the development of the economy and inflation, as well as market regulation.

THEORY OF REGULATED CURRENCY. (Look4) ) The Keynesian theory of regulated currency arose under the influence of the global economic crisis of 1929-1933, when the inconsistency of the ideas of the neoclassical school, which advocated free competition and state non-intervention in the economy, was revealed. In contrast to the theory of the exchange rate, which allowed for the possibility of automatic equalization, the theory of a regulated currency was developed on the basis of Keynesianism, which is represented in two directions.

The first direction is the theory of flexible parities or a maneuverable standard, developed by I. Fisher and J. M. Keynes. Fisher proposed stabilizing the purchasing power of money by manipulating the gold parity of the monetary unit. Unlike Fisher, Keynes defended elastic parities in relation to fiat credit and paper money, since he considered the gold standard a relic of the past. Keynes recommended depreciating the national currency in order to influence prices, exports, production and employment in the country, in order to fight for foreign markets.

The second direction - the theory of equilibrium exchange rates or neutral rates - replaces purchasing power parity with the concept of “equilibrium exchange rate”. According to Western economists, a neutral exchange rate is one that corresponds to the equilibrium state of the national economy.

THEORY OF KEY CURRENCIES. (Look4) ) The historical basis for the emergence of this theory was a change in the balance of forces in the world in favor of the United States based on the increasing uneven development of countries. Representatives of the theory of key currencies are American economists J. Williams, A. Hansen, English economists R. Hawtrey, F. Graham and others.

The essence of this theory lies in the desire to prove:

the need and inevitability of dividing currencies into key (dollar and pound sterling), hard (currencies of the rest of the Group of Ten countries - the German mark, the French franc, etc.) and soft, or “exotic” currencies that do not play an active role in the IEO;

the leading role of the dollar as opposed to gold (in their assessment, the dollar is “not worse, but better than gold”);

the need to orient the monetary policy of all countries towards the dollar and support it as a reserve currency, even if this contradicts their national interests.

The crisis of the Bretton Woods system exposed the inconsistency of claims about the superiority of the dollar over other currencies. The American currency turned out to be as unstable as other national fiat credit money.

THEORY OF FIXED PARITIES AND RATES. (Look4) ) Proponents of this theory (J. Robinson, J. Bickerdyke, A. Brown, F. Graham) recommended a regime of fixed parities, allowing them to change only in the event of a fundamental imbalance in the balance of payments. They 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 on world markets depending on exchange rates. This theory influenced the principles of the Bretton Woods monetary system, based on fixed parities and exchange rates.

THEORY OF FLOATING CURRENCY RATES. (Look4) ) Representatives of this theory are mainly economists of the neoclassical (monetarist) school. The essence of this theory is to substantiate the following advantages of the floating exchange rate regime compared to fixed ones:

automatic equalization of the balance of payments;

free choice of methods of national economic policy without external pressure;

curbing currency speculation, since with floating exchange rates it takes on the character of a zero-sum game: some lose what others gain;

stimulating global trade;

The foreign exchange market determines the exchange rate ratio of currencies better than the state.

According to monetarists, the exchange rate should fluctuate freely under the influence of market demand and supply, and the state should not regulate it.

NORMATIVE THEORY OF EXCHANGE RATE. (Look4) ) This theory considers the exchange rate as an additional tool for regulating the economy, recommending a flexible exchange rate regime controlled by the state. This theory is called normative, since its authors believe that the exchange rate should be based on parities and agreements established by international bodies.

The supply and demand of various currencies on the world market tends to change, as a result of which changes in exchange rates occur in relation to each other. It is obvious that with an increase in exchange rates, demand will decrease, and if it decreases, on the contrary, it will increase. Accordingly, the supply of currency at a higher rate is more preferable than at a low one. In the process of analyzing the supply and demand of currencies, it is necessary to pay attention to the factors influencing exchange rates.

Experts identify the following main factors: changes in interest rates, changes in the state of the economy, purchasing power parity and cash flows.

The first factor is interest rate changes. The interest rate refers to the return on deposits in any currency. The profitability of deposits in commercial banks is affected by the interest rate set by the central banks of various countries. The higher the interest rate, the more profitable it is to invest in deposits. Accordingly, the country with a higher rate of return will receive more more money, and the exchange rate in turn will rise. Most often, it is the profitability of financial instruments that determines the movement of capital.

The second factor influencing exchange rates is the state of the economy of the country of issue of the given currency. If the economic situation in the country improves, the demand for various goods increases. There is one peculiarity here, which is that the change in demand for goods occurs only in the long term, and not immediately. Theoretically, the deterioration of the situation in the country should lead to an increase in exchange rates, but in reality the opposite is more often the case, which is associated with a reduction in business activity.

The third factor is purchasing power parity. According to the theory of purchasing power parity, the same amount of money, translated at current rates of different national currencies, should be exchanged for the same amount of goods and services. In the long term, other things being equal, the exchange rate should reflect this indicator. The determination of purchasing power parity depends on the structure of the consumer basket and on the conditions of production of goods. Since there is no single way to determine the price of the basket, the concept of exact values ​​of exchange rates through this indicator is not possible. But, currency fluctuations, one way or another, occur around a certain level of purchasing power parity.

The fourth factor is cash flow. The combined influence of all factors leads to the movement of cash flows between countries. This process is accompanied by the exchange of the currency of one country for the currency of another. As a result, the country's balance of payments is formed. If its value is positive, then there is an influx of capital and, accordingly, an increase in the national exchange rate. If its value is negative, then there is an outflow of capital and, as a rule, the exchange rate decreases.

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Like any price, the exchange rate deviates from the cost basis - the purchasing power parity of currencies - under the influence of supply and demand for the currency. The relationship between 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.
There are market and structural (long-term) factors influencing the exchange rate.
Market factors are associated with fluctuations in business activity, the political and military-political situation, rumors (sometimes hype), guesses and forecasts.
Along with market factors, the influence of which is difficult to predict, on the demand and supply of currency, i.e. The dynamics of its exchange rate are also influenced by relatively long-term trends that determine the position of a particular national currency in the currency hierarchy. Among these factors are the following:
1. National income growth. This factor causes increased demand for foreign goods, while at the same time, commodity imports can increase the outflow of foreign currency.
2. Inflation rates. The ratio of currencies according to their purchasing power (purchasing power parity) is a kind of axis of the exchange rate, therefore the rate of inflation is influenced by the rate of inflation. The higher the inflation rate in a country, the lower the exchange rate of its currency, unless other factors counteract it. This trend can usually be observed in the medium long term. The equalization of the exchange rate, bringing it into line with purchasing power parity, occurs on average within two years.
3. State of the balance of payments. Active balance of payments promotes appreciation national currency, because at the same time, the demand for it from external debtors increases. The passive balance of payments creates a tendency for the national currency to depreciate, because debtors sell it for foreign currency to pay off their external obligations. IN modern conditions The influence of international capital movements 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 - shares, bonds, bills, short-term deposits.
IN developing countries, the securities market can slow down the growth of foreign currency exchange rates, diverting free cash from exchange for hard currency.
4. Differences in interest rates in different countries. The influence of this factor on the exchange rate is determined by two main circumstances. Firstly, changes in interest rates in a country affect, other things being equal, the international movement of capital, especially short-term capital. An increase in the interest rate stimulates the influx of foreign capital, and a decrease in it encourages the outflow of capital, including national capital, abroad. Second, interest rates affect the operations of foreign exchange and debt capital markets.
5. Activities of foreign exchange markets And speculative currency transactions. If the exchange rate of a 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 quickly respond to changes in the economy and politics, and to fluctuations in exchange rates. Thus, they expand the possibilities of currency speculation and the spontaneous movement of “hot” money.
6. Extent of use of a particular currency on the European market and in international payments. For example, the fact that 60-70% of the Eurobank's transactions are carried out in dollars determines the scale of demand for this currency and its supply. The exchange rate is also affected by the degree of its use in international payments.
7. The degree of confidence in the currency on the national and world markets. It is determined by the state of the economy and the political situation in the country, as well as the factors discussed above that influence 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 the currency, but also the prospects for their dynamics.
8. Monetary policy. The relationship between market and government regulation of the exchange rate affects its dynamics. The formation of the exchange rate in foreign exchange markets through the mechanism of supply and demand for currency, as a rule, is accompanied by sharp fluctuations in exchange rates. The real exchange rate is formed in the market - an indicator of the state of the economy, monetary 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 objectives of monetary and economic policy.
9. Degree of development of the stock market, which is a competitor in the foreign exchange market. Stock market can attract foreign currency directly, as well as “pull back” funds in national currency, which could be used in the foreign exchange market to purchase foreign currency.

Currency quotes

Currency quotes is the value of a unit of one currency (called the base currency) expressed in units of another currency (called the quote or counter currency). In the designation of a traded currency pair (for example, eur/usd), the base currency is written first, the quoted currency - second.

Currency quotes are presented in numerical and graphical form. The basis of technical analysis is the study of the history of Forex quotes in the form of charts. Quote charts, in turn, can be presented in the form of bars (English system), Japanese candlesticks and in the form of a line chart. Japanese candlesticks are the most popular among traders due to the visual simplicity of their analysis. The analysis of Japanese candlestick forms and their combinations is called candlestick analysis.

If the currency quote chart moves upward, this means that the base currency is becoming more expensive, and the counter currency is becoming cheaper. If, on the contrary, there is a downward movement, then this indicates a depreciation of the base currency in the forex quote.

Currency quotes are constantly changing, they depend on the current relationship between supply and demand. If you are able to predict the movement of currency quotes, you can successfully make money from it.

In order to work on a currency pair, you need to thoroughly know the history of its quotes, that is, study the nature and behavior of the currency pair. The behavior of a currency pair is not constant over time; it can change depending on economic cycles and political situations both in a particular country and in the world. Therefore, for successful trading it is necessary to constantly improve your trading strategy, adjust it to market realities.

Currency quotes contain two components. The first is the price (quote). Bid is the price at which the client can sell the base currency for the quoted currency. The second price (quote) Ask or Offer is the price at which the client can buy the base currency for the quoted currency. The difference between Ask and Bid is called spread.

The size of the spread depends on the currency pair in question, the transaction amount, the state of the markets and the broker company. The minimum change in currency quotes is called a point (Point, Pips). Different instruments and currency pairs are quoted with different precision, i.e. with different number of decimal places in the quote. Currency quotes can be direct or reverse. Direct currency quotation is the amount of national currency for one unit of foreign currency. Reverse currency quotation - the amount of foreign currency per unit of national currency.

In addition to direct and reverse currency quotes, there are cross courses. This relationship between two currencies, which follows from their exchange rate against a third currency (most often the US dollar.). Here are examples of cross rates: EUR/GBP, EUR/JPY, GBP/JPY.

· cross course - this is the exchange rate between currencies excluding the US dollar. The activity of trading cross rates has a certain impact on the main exchange rates against the dollar, and vice versa. Analysis and forecasting of cross rates, especially for non-hard currencies, is associated with great difficulties, since the markets for these currencies and the volumes of transactions are so small that they are often subject to strong speculative fluctuations at the initiative of individual participants.

· It is necessary to understand that cross-currency rates are a secondary indicator. They are calculated through the main exchange rates against the dollar. That is, the cross rate of the euro to the yen is calculated based on the current exchange rates of the euro and the yen against the dollar. However, cross-rate analysis helps to identify different rates of change in major exchange rates. For example, with a general rise in price of the dollar, the euro and the yen may weaken with at different speeds. It is difficult to see the difference in speeds based on observing the main rates of these currencies, but cross-rate analysis makes it quite easy to discern.

· Analysis and forecasting of cross-currency rates are no different from the analysis of main rates.

· Active trading of cross rates, in turn, also affects the main exchange rates. For example, if the euro is actively bought against the English pound, Swiss franc or Canadian dollar, then an increase in demand for the euro will lead to its rise in price relative to the dollar. However, the speed and strength of the appreciation of the euro in relation to different currencies may differ. Thus, the analysis of cross rates is of no small importance when forecasting major exchange rates.

Today we will talk about factors affecting the exchange rate. This information will be useful to those investors who are interested in investing in foreign currencies. Currently, in all countries, local currency quotes are set under the influence of the supply/demand balance. As a rule, the central banks of these countries periodically only adjust the local currency quotes, but in some countries the central banks have quite a strong influence on the value of local money.

If the central bank of a state has virtually no influence on the value of money, then the exchange rate is considered to be floating. Quotations for the domestic ruble became floating only in 2014; until that moment, the Central Bank had a significant influence on the price of the local currency. The domestic Central Bank spent a significant amount of available foreign exchange reserves to carry out measures to maintain the value of the ruble.

The value of the currencies of countries with a floating rate is influenced by a number of factors, including:

1. Current trade balance.
2. Macroeconomic factors.
3. Activities carried out by the Central Bank.
4. Trust in local currencies by the population.
5. Actions of speculators.

Factors influencing the exchange rate. Trade balance

The term “trade balance” usually means the ratio of export and import transactions. This is due to the fact that exports provide an influx of foreign currency into the local economy, while imports, on the contrary, remove foreign money from the economy.

Thus, if a state imports more than it exports, then it has a negative trade balance, which negatively affects the value of local money. This is due to the fact that there is a shortage of foreign currency in the country, which provokes rapid growth demand for it.

A positive trade balance can also have a negative impact on the economy. The presence of such a balance leads to an increase in the price of local money. If this rise in price is too significant, then goods from local producers will not be able to compete normally with foreign ones both in the domestic and international markets.

Macroeconomic factors

Indicators such as the current unemployment rate, GDP size, and inflation rates have a fairly serious impact on the value of local money. It should be noted that not only the current values ​​of the indicators mentioned above, but also forecasts compiled by experts can cause a change in the value of local money. For example, if experts predict an increase in unemployment or inflation, this may cause a decrease in the value of the local currency. Similar situation occurs because the population, having become familiar with expert forecasts, may begin to buy foreign currencies.

Activities carried out by the Central Bank

Central banks of various countries have a variety of tools that make it possible to have a fairly serious influence on the value of the local currency. Among the instruments used by central banks, it should be noted:

1. Currency interventions. Using this instrument, the Central Bank is able to both increase the value of the local currency and reduce it. To achieve this goal, the central bank carries out large transactions to buy or sell currency, thereby provoking an increase or decrease in demand for foreign currencies.
2. Issue of additional amounts of money. The Central Bank uses this instrument in cases where there is a shortage of money supply in the country. This event results in a decrease in the value of local money.
3. Change in discount rate. This tool allows you to both increase and decrease quotes.

Level of trust in local money by the population

If the population does not believe in the stability of the local currency, then it prefers to keep its existing savings in foreign money. This situation is typical for countries with relatively weak economies. At the same time, it can also be observed in countries with developed economies during economic crises, as well as if local money quotes change frequently. The population's distrust of local money usually causes a decrease in its value.

Currency speculation

Large speculators can also influence the value of various currencies. Many speculators conspire among themselves to pump up the quotes of the chosen currency and make money on it.

If the actions of speculators threaten the stability of the local currency, the central bank usually imposes sanctions against specific speculators. Typically, speculators who were suspected of collusion are prohibited from conducting transactions with local currency for a certain period. If you are planning to invest in foreign currency, then based on the factors mentioned above, you can make a forecast of changes in their quotes.

Fundamental analysis is a term for a number of methods for predicting the market (exchange) value of a company and the movement of exchange rates, based on the analysis of financial and operational indicators.

Fundamental factors have a significant impact, but they do not provide a 100% guarantee of the desired change in quotes. Before opening a position, it is necessary to study the trends present in the market, and only after that make a decision in which direction to open a position. When working in financial markets, two types of analysis are used - technical and fundamental. Both types of analysis attempt to predict the future relative to price movements. The difference between them is that fundamental analysis looks at the market more from the point of view of the functioning of the economy, rather than from the point of view of the functioning of the market itself (technical analysis).

The school of fundamental market analysis arose with the development of applied economic science. It is based on knowledge about the macroeconomic life of society and its impact on the dynamics of prices of specific goods. the main task schools of fundamental analysis - to form and predict new trends in price dynamics, therefore, the purpose of fundamental analysis is to analyze and forecast fundamental factors and their impact on trend price dynamics.

Strategic investors who make long-term investments focus their work on fundamental analysis, although they miss short-term technical price fluctuations.

The concept of the exchange rate and basic definitions.

Exchange rate– the price (quote) of a monetary unit of one country, expressed in the monetary unit of another country, precious metals, securities.

There are the following types of exchange rates:

• • fixed exchange rate;
  • unstable exchange rate - fluctuates within a corridor;
  • floating rate, which changes depending on market demand and supply;
  • current SPOT rate (TOD i TOM);
  • forward rate;
  • futures rate;
  • market and calculated average weighted exchange rate for trading.

1) according to the method of regulation:
2) by type of market:

Externally, the exchange rate is presented to exchange participants as a conversion factor from one currency to another, determined by the relationship between supply and demand in the foreign exchange market. However, the cost basis of the exchange rate is the purchasing power of currencies, which expresses the average national price levels for goods, services, and investments. This economic category is inherent in commodity production and expresses the production relations between commodity producers and the world market. Since value is a comprehensive expression of the economic conditions of commodity production, the comparability of national monetary units of different countries is based on the value relationship that develops in the process of production and exchange. Producers and buyers of goods and services use exchange rates to compare national prices with prices in other countries. As a result of the comparison, the degree of profitability of the development of any production in a given country or investment abroad is revealed. No matter how the action of the law of value is distorted, the exchange rate is subject to its action and expresses the relationship between the national and world economies, where the real exchange rate relationship between currencies is manifested.

When goods are sold on the world market, the product of national labor receives public recognition on the basis of an international measure of value. Thus, the exchange rate mediates the absolute exchangeability of goods within the world economy. The cost basis of the exchange rate is due to the fact that the international price of production, which underlies world prices, is based on the national prices of production in countries that are the main suppliers of goods to the world market.

The exchange rate is required for:

• mutual exchange of currencies in the trade of goods, services, in the movement of capital and loans. The exporter exchanges the proceeds of foreign currency for national currency, since the currencies of other countries cannot circulate as a legal means of purchase and payment in the territory of a given state. The importer exchanges national currency for foreign currency to pay for goods purchased abroad. The debtor purchases foreign currency with national currency to repay debt and pay interest on external loans;
• comparison of prices on world and national markets, as well as cost indicators of different countries, expressed in national or foreign currencies;
• periodic revaluation of foreign currency accounts of companies and banks.

Mechanism for determining the nominal exchange rate in the foreign exchange market is a regulated share of state participation and is called the exchange rate regime. There are administrative and market exchange rate setting regimes.

Administrative mode appears in uniform plural exchange rates, i.e. this is the presence of differentiated exchange rates between currencies different types operations, product groups and regions. The administrative regime is used as a stabilization measure in conditions of economic crisis to reduce inflation and to accumulate gold and foreign exchange reserves. The introduction of an administrative regime is a temporary step towards the normalization of the economic situation in the country and the transition to market conditions exchange rate formation. This regime was first used during the economic crisis of 1929-1933. after the abolition of gold monometalism.

Market regime exchange rate formation is divided into three types:

• 1. A fixed regime is one in which countries have a pegged or fixed exchange rate. Such countries fix the value of their currency with zero or very narrow limits (no more than 1%) of such deviations from other foreign currencies or combined currencies. The leaders in the list of reference currencies to which the national currency is pegged are the US dollar and the euro. An example of 100% fixation is the countries of the European Union. They fixed the exchange rates of their national currencies within the EU relative to other currencies and the new euro currency as of the last working day of 1998 and adhered to certain exchange proportions until the final implementation of the single euro currency.
• 2. A regime in which countries have limited exchange rate flexibility. Those. - this is a regime when certain relationships between national currencies are officially established, which allow for slight fluctuations in the exchange rate, respectively existing rules. This procedure for regulating exchange rates includes the currency corridor regime - establishing boundaries for fluctuations in the exchange rate of the national currency in order to stabilize the monetary and financial system
• 3. Mode with increased course flexibility. Exchange rates can move freely, changing under the influence of factors of supply and demand, etc. This mode has subcategories:
  • freely fluctuating rate;
  • managed fluctuating;
  • exchange rate, which is periodically adjusted.

Factors influencing the exchange rate.

Like any price, the exchange rate deviates from the value basis - the purchasing power of currencies - under the influence of supply and demand for the currency. The ratio of such supply and demand depends on a number of factors. The multifactorial nature of the exchange rate reflects its relationship with other economic categories - value, price, money, interest, balance of payments, etc. Moreover, there is a complex interweaving of them and the promotion of some or other factors as decisive. Among them are the following.