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Questions and StoriesCategory: QuestionsWhat Is the Number One Factor That Influences a Country’s Currency Value and Strength?
Nnaemeka Victor asked 5 months ago

What Is the Number One Factor That Influences a Country’s Currency Value and Strength?

I think it is the inflation rate.

Myriam Pierre replied 5 months ago

I will say that it is economics.

Kenneth replied 5 months ago

The number factor that influences a country’s currency value and strength is their employment and unemployment rate.

Terry Lynch replied 5 months ago


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13 Answers
Best Answer
Vahid Chaychi Staff answered 5 months ago
  1. Interest rate is almost the most important factor.
  2. GDP (Gross Domestic Product)
Steven Wallerstein replied 5 months ago

Money supply.

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Edward Duffy answered 5 months ago

That is a very good question. There are a number of factors that can influence a countries currency value and strength and yes Vahid is correct but there are a number of other factors and that is political stability, the state of the finances in the country and the unemployment rate which can have a significant influence on the strength of the currency. GDP (Gross Domestic Product) or the value of goods and services that a country produces is generally fed by all of the above factors that I have mentioned above. If you monitor the currency charts whenever there is an impending interest rate decision or a person of note from a central bank delivers a speech you can normally see significant movement in the charts.

Kenneth replied 5 months ago

Well said

[email protected] replied 5 months ago

1) Central Bank Policies, Interest Rates and using of tools available with them to control the economic factors.
2) Political decisions like war, trade war.
3) Population and Poverty

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Eli Davis Keinamura answered 5 months ago

production levels of the nation will greatly influence the currency valve,high mass production means high currency valve and low levels of production means means low currency valve

David replied 5 months ago

Inflation is the one factor that influences the strength of a currency the most. Of course, interest rates, supply and demand factors also have an effect on inflation and ultimately the currency.

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Gareth White answered 5 months ago

I think you always have to go back to economics basics for this type of question looking at things like inflation, interest rates, monetary policy, import / export value, tourism and of course geopolitical stability. With the outbreak and waves of COVID for example its amazing the ripple effect this has had on all economies

Vicaris replied 5 months ago

Yes , true talk

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Male answered 5 months ago

The number one factor that influences a country strength is Production of goods and services or creation of industries.

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Ahmad Khasan answered 4 months ago

I think the economic structure of a country is the strongest determinant of its currency. A country with a strong economy, an advance innovation, and a robust science will surely has strong currency.
Currency, in my opinion, is the reflection of a country economy in contrast with its counterpart. If the currency of a country is stronger than their counterpart, it means that it has a stronger economy.

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Leno Jean Pierre answered 4 months ago

I think one of the factors that influence the country’s currency value and strength is the demand and supply for it. Just like value of goods and services.

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Jackson Mugarura answered 4 months ago

GDP is the king! This the total value of goods and services that is produced in a country, in a specified period of time, usually in a financial year. I think this is the reason why the US dollar remains the strongest currently in the world. US economy is the hub of everything. So, I don’t see how a country that imports everything from cars to even razor blade, can have a strong currency.!

Jackson Mugarura replied 4 months ago

We still have some countries that even import toilet paper, handkerchiefs etc. It’s therefore, not easy for such a to have a strong currency. This is because, import a lot means that the demand for dollars as medium of exchange is high.

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Kenneth Ogbonnaya answered 4 months ago

It is employment rate.

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Nnaemeka Victor answered 4 months ago

Your answers are spot on. Central bank policies, government policies, interest rate, inflation rate and GDP plays significant role in any country’s currency value.

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Leno Jean Pierre answered 4 months ago

I’m not an economist to have a deep understanding of this topic.After reading your comments i have got some ideas that will feed my mind for next time.

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Kenneth Ogbonnaya answered 4 months ago

There are many factors that affect a country or countries currency, these factors include GDP, UNEMPLOYMENT RATE, CENTRAL BANK POLICY etc.

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Kenneth Ogbonnaya answered 3 months ago

One factor that influence country currency both in value and strength is, the increase of goods and services

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