Fixed Exchange Rates - How Are They Managed?

[@FilmsPharmacy]

Bro... you're a living legend. So precise and clear at explaining things. Keep it up man.

[@austinwachira5185]

Man makes you grasp Economics right to the very core!!

[@salmanqureshi3361]

this is a really good video, I actually understand exchange rates now. Thanks a lot and keep these videos coming.

[@rishikakedia]

econ plusdal i love you. you might be the only reason m not failing my econ alevel.

[@michellesilva7366]

finally!!!!!!!!! i understand exchange rates !! i was terribly confused!!

[@bengodleman18]

Brilliant video !!! Thanks for taking the time to make this !!!

[@ManishKumar-rr3sz]

Your videos are awesome bro, thanks a lot for the effort.

[@muhammadhilal5807]

What an clear explanations, thanks :)

[@ouicestmoietquoi]

EconplusDal, I don't understand why the government buying pounds causes demand for pounds to increase. Who is demanding pounds as a result of gov buying them? Surely the gov buying pounds decreases supply which is why the price rises? Please help me understand!

[@jaweriahnoor8802]

the reason which the government is buying up pounds is to increase the demand for pounds and thus appreciate the currency. The government can simply demand pounds in the market and receive them and yes that is why prices are rising meaning the exchange rate strengthens BUT you also have to look at other currencies' demand. If the demand for pounds is significantly lower than the demand for dollars then that would mean that dollar is a stronger rate of exchange once the govt buys pounds increasing the demand for pounds dollars become weaker and pounds become stronger

[@D17D]

4:14 moment of realization

[@amankataria1997]

Hi Sir. In the beginning of the video, you said you made a video for specifically floating exchange rates, however I have been looking through all your videos and I cant seem to find that video. Would you mind giving me the link to that video? Thanks for all the time and effort spent making these fantastic videos

[@EconplusDal]

aman singh Thank you - videos are herekzbin.info/www/bejne/mpSbgq2Oo9abrsU kzbin.info/www/bejne/oXKnYWWFj56SicU kzbin.info/www/bejne/p6jMpYKYbMqFrJY

[@theegg8358]

Thank you vikstar

[@a.mradio2552]

exactly! this man is a legend

[@khushibasediya1956]

Loved your video sir

[@noirenthusiast3422]

Exceptional at explanation

[@emvn4429]

if you sell the pound against wouldn't there be an inward shift in the supply of the pound?

[@joshan6364]

no

[@AlevelStudent-c1y]

By buying up the pound, wouldn’t this lead to a contraction is supply which would cause a revalue of the exchange rate ? Why would demand increase ?

[@oliverburgess9458]

for the second graph why would the quantity of the pound increase if the government bought more of them ?

[@abdulmoiz1993]

Because they are increasing the supply of the foreign currency

[@seadrown6252]

@@abdulmoiz1993 but the pound isn't a foreign currency, its the domestic one

[@isabellawilliams583]

You're literally an icon

[@lasandrabuffie9124]

I really appreciate your video first of all. Quick question though: when the central bank sells the pound on the market you call it an increase in supply, but when it buys the pound it is an increase in demand. Why aren't the two operations just polar opposites of one another? As in, why can't selling the pound be considered a decrease in demand or buying the pound be considered a decrease in supply?

[@OSpenc]

To decrease the value you need to sell the pound onto the FOREX market because this puts more pounds into the market and therefore lowers the value. However, you can't physically decrease the supply of the pound in the FOREX markets to increase the value as the FOREX market is independent of government control - that is why the only way of increasing the value is by the government buying the pound from the FOREX market...

[@dhanik1417]

I had a similar question and this helped a little but would you be able to explain why the government can't buy pounds off FOREX which would have an effect of decreasing the amount available (i.e. decreasing supply)? Thank you

[@readjake768]

agreed

[@jamiek8603]

@@OSpenc but why doesn't buying pounds cause the supply to contract as surely there is less pounds that can be bought, therefore the exchange rate appreciates.

[@billparkinson6017]

How are the fixed/pegged rates calculated to begin with? I believe there’s bands, or a range that they move in?? How do you figure out what the bands are? How will you know if they change?

[@AminuHamisualiyu]

Thank you. Sir

[@joewatkins1667]

if a country has a fixed exchange rate, what can they do with the exchange rate to decrease inflation?

[@pearlyntan9379]

Hi Sir. When the government uses foreign currency to buy domestic currency in the market, is the demand increasing or supply decreasing?

[@sharepremium8614]

The demand for local currency is incresing and this causing it to appreciate ( sorry im 4 years late )

[@jaweriahnoor8802]

the supply of foreign currencies are increasing in contrast to the supply of domestic products thus the value of exchange rate appreciating

[@maxcotton620]

How might a fixed exchange rate cause a deflationary bias in the economy?

[@artupayrus]

surely if you are buying £'s on the right side diagram supply would shift left instead of having an effect on demand because if you shift demand to the right, quantity is shown to increase, whilst if you were to decrease supply of pound it would show quantity to decrease.

[@jacobchennells7419]

they use foreign currency to buy £s so the demand for £ increases and therefore the price exchange rate also increases

[@artupayrus]

@@jacobchennells7419 yeah but if you look on the axis, it shows that quantity of the pound has increased from q1 to q2 which is impossible if you are buying £'s off from the market

[@shahriyarhussain3067]

Hmm Yeh the quantity demanded increases from q1 to q2, because when you use the foreign cureency reserves to buy the £ the demand for £ essentially increasss hence the increase from q1 to q2; it signifies the increase in quanity demanded for the £

[@joeball3557]

Could someone send me the link for the previous video he is talking about at the start

[@xinyangguo7517]

why would the supply of a currency decrease if the interest rate is raised? Could someone explain this plz

[@jaweriahnoor8802]

because of a concept known as hot money outflows as interest rates decrease domestic savers shift their savings to high paid interest rates on saving in other countries thus these savers increase the supply of domestic currency as they will exchange domestic for foreign currency and thus increase the demand for foreign currency resulting in devaluation of exchange rate and vice versa

[@bhavnakhari93]

please do a video on national income accounting . Thanks

[@03f12]

I dont understand why the supply would increase when interest rates decrease

[@jaweriahnoor8802]

because of a concept is known as hot money outflows as interest rates decrease domestic savers shift their savings to high paid interest rates on saving in other countries thus these savers increase the supply of domestic currency as they will exchange domestic for foreign currency and thus increase the demand for foreign currency resulting in devaluation of exchange rate and vice versa

[@mergy5325]

Great video! You need some lighting.

[@amankataria1997]

Mergy Vox you need screen brightness.

[@LindaAndrews-ly1qf]

Depreciate: Sell the pound; buy foreign currency so increase supply of pound and bring it down Appreciate: use foreign reserves to buy Pound to increase demand

[@remyboy1002]

yup pound good to exchanger rates to us dollar. fixed the accounts thank yours

[@yulunzhang5835]

Thank u soooo much

[@natashamclean7044]

goat

[@AjRicho21]

Awesome video brooo😎like if u agree 😂🤣👌🏻

[@michaelk6319]

Alex Richardson I love my sexy econplusdal

[@AjRicho21]

Michael K stop harassing me you freak!

[@michaelk6319]

Alex Richardson What do you mean, you silly willy

[@michaelk6319]

Alexander Richardson Never!!

[@dazfriend6099]

Hiiiiii everyone

[@ewanyeo1173]

Are you Jesus? Because you've saved me from my sins

[@divyasamyani3947]

In hindi

[@obelix2545]

Heh?

[@connorhibbs8763]

Sorry dal, that was such a bad video. Anther one to this standard and I'm going to have to fight you. Keep it up man!