What is exchange balance?

The term exchange balance simply refers to the amount of crypto that’s currently held on a particular platform – usually in several separate known wallet addresses. If the amount of crypto held on an exchange is high, it means there is a lot of liquidity for buying and selling tokens.

What is the relationship between balance of payments and exchange rates?

The relationship between balance of payments and exchange rates described here exists only under a free or floating exchange rate regime. The balance of payments does not impact the exchange rate in a fixed-rate system, because central banks adjust currency flows to offset the international exchange of funds.

How does balance of trade affect currency exchange rates?

The balance of trade (which reflects higher or lower demand for a currency) can affect currency exchange rates. A country with a high demand for its goods tends to export more than it imports, increasing demand for its currency. A country that imports more than it exports will have less demand for its currency.

What is a balance of trade?

balance of trade, the difference in value over a period of time between a country’s imports and exports of goods and services, usually expressed in the unit of currency of a particular country or economic union (e.g., dollars for the United States, pounds sterling for the United Kingdom, or euros for the European Union).