Question

Topic: exchange rate regime in developing countries (Russia and Kazakhstan)

Who are effected by your selected country’s macroeconomic indicator’s changes? How?

Answer 1

EXCHANGE RATE REGIME: An exchange rate regime is the way a monetary authority of a countryor currency union manages the currency in relation to other currencies and the foreign exchange market. these regime are of three types:-

1. Floating exchange

2. Fixed exchange

3. Pegged float exchange

RUSSIA EXCHANGE RATE REGIME: Russia is currently using a floating exchange rate regime, which means that foreign exchange rate against the ruble are determined by market forces, that is the ratio of the demand and supply of foreign currency in the foreign exchange rate.

KAZAKHSTAN EXCHANGE RATE REGIME: Kazakhstan adopted an unofficial policy of a 'soft' fixed exchange rate system pegging its domestic currency against the US dollar in 1993. Value of the domestic currency initially was fixed at a rate of T5\$1.

SELECTED COUNTRY'S MACROECONOMIC INDICATOR'S CHANHGES ARE EFFECTED ON: Russia's exchange rate regime is effected by the change in India's macroeconomic indicators because Russia follows floating exchange rate which fluctuate with the changes in the India's macroeconomic indicator.