From 2010 until early 2013, the Australian dollar appreciated against many major currencies and at times exceeded parity with the US dollar. The effect on Australian businesses were quite disparate with significant gainers and losers. You are required to: (a) Discuss the arguments for and against floating exchange rates. (b) The current Australian dollar exchange rate regime is a managed float exchange rate system with minimum government or central bank intervention. Explain with assistance of examples, three broad methods that a central bank or a government may use to influence the value of a currency. c) You must access credible sources of information. d) Turnitin before submitting and Citations and References must be MATCH View Less >>
In the open economies, the exchange rate is the major comparative price economy-wide, which assists in maintaining stability and balance across the real as well as financial economic side. Along with the various variables, like, interest rates, prices and output, exchange rate amends to concurrently equate supply and demand in the markets of foreign exchange, other financial markets, as well as markets of goods and services. (Garton, Gaudry, & Wilcox)  A floating exchange, also called as fluctuating exchange rate, is the kind of regime of exchange rate in which a the value of a currency is permitted to rise and fall as per the foreign exchange market. A currency, which uses a floating exchange rate, is called as a floating currency.  In today’s contemporary time, most of the currencies of the world are floating currencies. Often, central banks, take part in the markets for trying to influence he rates of exchange. Some of the currencies that are traded most extensively are the United States dollar, the Norwegian krone, the euro, the Japanese yen, the Swiss franc, the British pound, and the Australian dollar. (Ickes, 2009) Get solution

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