this is only a class presentation with brief definitions only

2. Group # A
 Ahsan jaffery
 Adnan Alam
 Usama
 Ahsan Rajpar

4. THE FOREIGN EXCHANGE
RATE ANDEQUILIBIRUM

5. OVERVIEW
1. Introduction
2. The Foreign Exchange Market
3. Exchange Systems
4. Types Of Exchange Rate
5. Determinants Of Exchange Rate
6. Equilibrium Of Exchange Rate

6. FOREX
(Foreign Exchange MarKet)
 The foreign exchange market is the market in
which participants are able to buy, sell, exchange
and speculate on currencies

7. Functions Of FOREX Market
 Transferfunction
 Hedging
 Credit
 Speculation

8. FOREX RATE
 A foreign exchange rate is the price of the
domestic currency stated in terms of
another currency.

9. Important Terms And Types
 Currency Appreciation
 Currency Depreciation
 Forward rate
 Spot rate

10. TYPES OF EXCHANGE
SYSTEMS
1. Fixed Exchange Rate
2. Floating/Flexible Exchange Rate
3. Managed Float

11. Fixed Exchange Rate
 A fixed exchange rate, is a type of exchange
rate regime where a currency's value
is fixed against either the value of another single
currency, to a basket of other currencies, or to
another measure of value, such as gold.
government entirely or predominantly
determines the rate

12. Floating Exchange Rate
 A floating exchange rate is a regime where
the currency price is set by the FOREX market
based on supply and demand compared with
other currencies.

13. Managed Exchange Rate
 A managed currency is one whose price and
exchange rate are influenced by some
intervention from a central bank

14. What happens when currency
appreciates ordepreciates??

15. Factors Affecting Foreign
Exchange Rate
 Inflation
 Interest rate
 Income

16. Equilibrium