The exchange rate between currencies of different countries is controlled primarily by supply and demand in currency markets.

Question

Quizplus · Accepted Answer

The exchange rate between currencies is determined by the interaction of supply and demand in currency markets. If the demand for a currency is high and the supply is low, its exchange rate will increase, whereas if the demand is low and the supply is high, its exchange rate will decrease. Therefore, the exchange rate is primarily controlled by supply and demand in currency markets.

The Exchange Rate Between Currencies of Different Countries Is Controlled