Cryptocurrency Q&A
What is the difference between a fixed and free exchange rate?
What is the difference between a fixed and free exchange rate?
BitcoinBaroness
Tue Oct 08 2024
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7 answers
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Can you explain the key distinctions between a fixed and free exchange rate system? How do they differ in terms of their functioning, the role of central banks, and the level of market influence? Which one offers more stability, and which one allows for greater flexibility in response to economic changes? Additionally, what are the potential advantages and disadvantages of each system?
7 answers
Pietro
Thu Oct 10 2024
A fixed exchange rate system represents a monetary policy tool employed by governments to maintain a stable exchange rate between their domestic currency and a foreign currency or a basket of currencies.
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Silvia
Thu Oct 10 2024
This system involves the monetary authority setting a nominal exchange rate that remains constant against the chosen foreign currency or currencies, often for the purpose of maintaining economic stability and promoting international trade.
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Silvia
Thu Oct 10 2024
Conversely, a floating exchange rate is determined by market forces in the foreign exchange market, where supply and demand for currencies dictate their value.
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DigitalLord
Wed Oct 09 2024
BTCC's services encompass spot trading, futures trading, and wallet services, among others, providing a seamless and secure platform for cryptocurrency trading and storage.
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Davide
Wed Oct 09 2024
In a floating exchange rate system, currencies are allowed to appreciate or depreciate freely in response to changes in economic fundamentals and market sentiment.
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