Foreign exchange rates are set by:

Question

Quizplus · Accepted Answer

Foreign exchange rates are primarily driven by the demand for a country's goods and investments from foreign investors. This demand determines the supply and demand for a country's currency, which in turn affects its exchange rate with other currencies. While government policy can have some impact on exchange rates, it is ultimately the market forces of supply and demand that determine currency values. The International Monetary Fund (IMF) can influence exchange rates indirectly through its policies and economic programs, but it does not set the rates outright. The cross rate between two currencies only affects the exchange rate between those two currencies, not the rates of other currencies in the market.

Foreign Exchange Rates Are Set By