Home >>singapore-exchange-rate
|
Singapore exchange rate:
Singapore exchange rate or rate of exchange is the price of one countrys currency expressed in another countrys currency. For example 1 US Dollar buys 1.58852 SGD, therefore the Singapore exchange rate is 1.5 to 1. The currency of Singapore is the Singapore Dollar and code is SGD. Changes in Singapore exchange rate have considerable effects on the profits of multinational corporations and value of foreign investments held by individual investors. These changes in Singapore exchange rate can be determined through devaluation of a currency, fixed exchange rates and floating exchange rates.
Devaluation is officially lowering the Singapore exchange rate by lowering its gold equivalency. By doing this, countrys exports become relatively inexpensive for foreigners and foreign products become relatively more expensive for domestic consumers, thereby discouraging imports. Thus the Singapore exchange rate in turn may help to reduce a countrys trade deficit.
The fixed Singapore exchange rate or pegged exchange rate is a term used when a countrys government or central bank ties the official exchange rate to another countrys currency. A set price is determined against a major world currency. In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged. The private market through supply and demand determines a floating exchange rate. Any differences in supply and demand will automatically be corrected in the market. Thus Singapore exchange rate affects its economy highly.
Imported goods become expensive when the demand for a currency is low and its value decreased, thus stimulating demand for local goods and services. This Singapore exchange rate in turn will generate more jobs, and hence an auto correction would occur in the market. A floating Singapore exchange rate is constantly changing.
| |
|
