Exchange rate graph, HELP (1 Viewer)

[risole91]

Can someone answer this for me:

Explain using graphs, how the RBA Can influence the exchange rate, by buying and selling the $A

 

[gnrlies]

I wont personally draw a graph because I cant be bothered, but just do it in terms of a normal supply and demand diagram....

the RBA intervenes in the forex market in extreme circumstances through the purchase or sale of australian dollars. All you have to do is show an increase in supply (a shift to the right) in order to devalue the currenct, and a shift in demand in order to demonstrate an appreciation.

Simple!

 

[risole91]

I wont personally draw a graph because I cant be bothered, but just do it in terms of a normal supply and demand diagram....

the RBA intervenes in the forex market in extreme circumstances through the purchase or sale of australian dollars. All you have to do is show an increase in supply (a shift to the right) in order to devalue the currenct, and a shift in demand in order to demonstrate an appreciation.

Simple!

Thanks man!

tbh i probably would've been able to work it out.
But i have like 100 eco q's due on wednesday.