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Balance of payments
What is the Link Between Balance of Payments and Currency Values?
November 21, 2023
How does the balance of payments affect the foreign exchange market?
The balance of payments influences the foreign exchange market by reflecting a country's economic transactions with the rest of the world. A surplus in the balance of payments, indicating higher exports than imports, might strengthen a currency due to increased demand. Conversely, a deficit might lead to currency depreciation as demand for foreign currencies rises.
Tags : Balance of Payments , Currency Values , Foreign Exchange Market