Question
Plot the inflation rates for the two countries- Denmark and Russia (MONTHLY) and their difference in one chart. Plot the spot exchange rate as 1
Plot the inflation rates for the two countries- Denmark and Russia (MONTHLY) and their difference in one chart. Plot the spot exchange rate as 1 unit of your currency for # units of rubles (MONTHLY, END OF THE MONTH) in another chart,. Describe what you can be observed and whether you can detect any change in pattern or behaviour. Which FX regimes have characterized these countries over this period? (notice that the two countries may have been determining their FX regime with respect to a third currency, or a basket of countries etc).
HELP FOR THIS QUESTION use BIS DATA ( ABOUT BIS STATISTIC)
[ Most currencies are quoted against the U.S. dollar (or against only a few major currencies). For example, the Turkish lira and the South Korean won are quoted against the U.S. dollar. But what if we wish to know how many won it takes to buy a lira? We need to calculate the cross rates.
On August 26, 2020, 1 USD bought 7.3628 TYR
On August 26, 2020 1 USD bought 1186.48 KRW
That is, 7.3628 TYR=11.86.48KRW
or, 7.3628/ 7.3628 TYR = 1186.48/ 7.3628 KRW
1 TYR=161.15 KRW
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