Question

1) Consider India and its trading partners. Based on your review of the Economist,

Wall Street Journal, the Financial Times and other similar periodicals, which of these countries is having currency problems? What are the causes of those currency problems?( at least 1 country) If you cannot find any current problems, then search and summarize

the most recent currency problems for your country and its partners. (20 points)

Answer 1

CURRENCY PROBLEM

Considering India and its trading partner, we will discuss the countries beside or nearby India, who are facing currency problems, Naming the first country which is Pakistan, who faces tremedous problem in currency and next we come to Bangladesh, who also faces the same kind of problem.

Now talking about what is the reason of currency problem or the sources from where the problem generates. For Pakistan, the main problem is their currency value, its value is comparatively less and its currency potential is not stable too, previously for the clash of Indo-Pak, lead an end to their trading business and thus it tends to degrade of their business, recently China had funded them for keeping the stability of their currency.

Next is Bangladesh, it face the same kind of problem, the value of their currency, which shows very less when it is compared to Dollar. As the value of Dollar is increasing frequently, and its leading to the problem for the trader of Bangladesh for payment, when they pay, they need to match the value of Dollar, which tends very expensive for them, and in return when they are paid, they are paid in less units of dollar. Even Bangladesh banks need to sell the Dollar in a limited range to some commercial banks, to get balanced.

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