Exchange rate

• Definition of the exchange rate
• Determination of the exchange rate
• Demand for & supply of currency and the factors that influence them
• Shifts in demand for & supply of currency
• What are currency depreciation & currency appreciation?
• What are currency devaluation & currency revaluation?
• Understand exchange rate systems - flexible, fixed and crawling peg.
• Understand how the Central Bank intervenes in the currency market when the exchange rate is fixed
• Impact of budget surplus and budget deficit on the exchange rate
• Definition of Government debt - accumulation of deficits minus surpluses
• Definition of the real exchange rate (RER).