Exchange rates imply currency exchange rates

 

domestic and foreign sales

Exchange rates imply currency exchange rates. Money is the money people use to buy and sell things. Money is invented from a variety of things based on people’s agreements. Various paper and metal currencies as well as minerals

deserve to be made of essentials. However, not all currencies are equally exchangeable.

Money is exchanged at different rates depending on people’s agreements and needs. For example, money is made of minerals such as silver

higher prices may be exchanged depending on the importance of the mineral.

Historically, spices such as amoles have been used as currency. Today, however, people around the world use the money made from various paper and metals. This is the reason why it is so easy to use. Thus, different countries use their own currencies.

The currency of a country may change as does the politics of the country. For example, the currency of Ethiopia during the reign of Haile Selassie was changed during the Dargii regime. This is as reasonable as the politics of the people who rule the country.

Exchange rates vary between domestic and foreign currencies. For example, one hundred rupees is exchanged for one hundred rupees in the country.

On the other hand, the 100(100ETB) currency in Ethiopia is currently exchanged for less than three US dollars (3 USD). It should be noted here that the exchange rate of one 100 birrs is always exchanged for 1 hundred birrs in Ethiopia. Foreign exchange rates, however, may increase or decrease from time to time. This is based on a variety of reasons.

So this increase and decrease in foreign exchange is a key issue from the Development Perspective. He is the one who is making people's lives more expensive and better.

Currently, foreign exchange rate increases are a serious headache in the developing economies of the world. How's it going? The answer to this question is attempted to be explained as follows. A country has to buy or produce what it wants. It is a must for the government and all people within the country's borders to get what they want. For example, things like:- cars, construction materials, weapons, various food items, construction materials, various fuels, electronics, agricultural equipment, various textiles and jewelry, medical supplies and medicines . . . .

So if these essentials are not produced in our own country, then we have to buy them from abroad. They have to get foreign currency to buy and import from abroad. For example, if Ethiopia wants to buy an aircraft from the United States, it must have US dollars to buy the aircraft. She can get the dollars in two ways. The first is if you earn dollars by selling various minerals and products in foreign markets. The second is if you don’t have the required dollars, you can exchange birr for dollars.

The second method of acquiring dollars will make the exchange rate of the dollar more expensive. This includes being based on the importance of the Ethiopian birr to the United States. The Ethiopian birr is useful to the United States if there are essential goods to be bought from Ethiopia. Besides, the Ethiopian birr is useless in Ethiopia and not abroad. Therefore, foreign countries must convert their products into foreign exchange even if they sell their products in birr in Ethiopia. For example, you may know about the black market1 The black market; -describes the illegal buying and selling practices of a few traders. The black market plays a major role in inflating foreign exchange.

Thus, people smuggle foreign products and sell them in Ethiopia for birr. But in order to buy the products they sell in birr from abroad, they have to convert the birr into foreign exchange. Therefore, they increase the price and buy birr to earn foreign exchange. For example, if the Ethiopian bank exchanges a dollar at 35 birrs, they will exchange it at at least 36 birrs. This act is the people facilitating them to leave the Ethiopian bank and exchange on the black market.

 So in this way, the number of dollars that Ethiopia would have in its banks will be reduced. This causes the value of the dollar to increase further. Thus, it means that there must be enough dollars in the banks of Ethiopia to raise the value of the dollar in Ethiopia. The method to solve the problem of dollar deflation the first is the mass production of foreign exchange-generating products. The second is to reduce the black market problem as much as possible. This act applies to all citizens. Otherwise, life will continue to be as expensive as it gets.