Exchange rates
Definition
The price of a currency.
1 euro = 4 zloties
means that
1 zloty = 0,25 euro
International currency market
System of rules, policy tools and institutions that
ensure free transfer of money among separate
currency areas
Domestic
market
Domestic
market
Domestic
market
Domestic
market
Domestic
market
Domestic
market
Why currency?
Co-existence of different national currencies
Malaysia
ringgit
China
yuan
Slovenia
euro
euro
South Korea
rupee
kuna
RSA rand
Finland
won
Croatia
forint
leu
India, Sri Lanka
Hungary
Romania
Currency symbols
DKK
Danish krone
YPN
PLN
Polish zloty
GBP
USD
Japanese yen
British pound
US dollar
Demand and Supply
price
SUPPLY
exporters, tourists,
banks
DEMAND
importers, tourists,
banks
ER
quantity
Lower supply of euro in Poland
Appreciation of EUR
PLN/EUR
Lower demand for Polish
goods in Euro zone
Supply
4,00
3,75
Demand
ilość waluty
Appreciation of EUR = Depreciation of PLN
Lower demand for euro in Poland
PLN/EUR
Supply
Depreciation of euro
3,75
3,60
Demand
Lower demand for European
goods in Poland
quantity
Depreciation of EUR = Appreciation of PLN
How will PLN/USD be affected by:
Poland introducing visas for the Americans?
Polish central bank ‘s intervention on the
currency market (purchase of USD)?
Introducing a ban on export of US beef to
Poland?
No visas required for Polish citizens to go to
US?
Reducing tariffs on American goods imported
to Poland?