Give 2 reason why there is rose in demand for foreign currency when its price falls?
Dear Student,
Foreign Exchange rate has inverse relationship with demand of that currency, with fall in price of foreign exchange the value of domestic currency increases which means that foreign goods becomes cheaper and their demand (import) rises. The increase in demand for foreign goods increases the demand of foreign exchange too.
Regards
Foreign Exchange rate has inverse relationship with demand of that currency, with fall in price of foreign exchange the value of domestic currency increases which means that foreign goods becomes cheaper and their demand (import) rises. The increase in demand for foreign goods increases the demand of foreign exchange too.
Regards