GENERAL KNOWLEDGE

Detailed explanation-1: -The nominal exchange rate is defined as the number of units of the domestic currency that can purchase a unit of a given foreign currency. The nominal effective exchange rate (NEER) is an unadjusted weighted average rate at which one country’s currency exchanges for a basket of multiple foreign currencies.

Detailed explanation-2: -Spot rates are the current exchange rates at which specific currencies can be bought or sold on currency exchange markets. In plain English, they are the “right now” rate for any given currency. If you choose to make an exchange immediately, your chosen currencies will be exchanged at the current spot rate.

Detailed explanation-3: -The exchange rate of a currency is how much of one currency can be bought for each unit of another currency. A currency appreciates if it takes more of another currency to buy it, and depreciates if it takes less of another currency to buy it.

Detailed explanation-4: -Most commonly, exchange rates are expressed as the number of units of domestic currency that will purchase one unit of foreign currency (e.g. units of currency per U.S. dollar). An exchange rate may also be defined as the inverse: the number of units of foreign currency that one unit of domestic currency will purchase.

Detailed explanation-5: -An exchange rate is a rate at which one currency will be exchanged for another currency. Most exchange rates are defined as floating and will rise or fall based on the supply and demand in the market. Some exchange rates are pegged or fixed to the value of a specific country’s currency.