equilibrium exchange rate

Definitions

Economics

  • This is ambiguous, since there is no single agreed upon model of the exchange rate:
  • The exchange rate at which supply and demand for a currency are equal.
  • The exchange rate at which there is balance of payments equilibrium.
  • The exchange rate at which purchasing power parity holds, in some form.
  • The exchange rate at which the expected change in the exchange rate, in the near future, is zero.
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