WHAT IS CURRENCY?

Currency is a generally accepted form of

money, including coins and paper notes,
which is issued by a government and
circulated within an economy. Used as a
medium of exchange for goods and
services, currency is the basis for trade.
Barter
HISTORY
This system has been used for centuries
and long before money was invented.
People exchanged services and goods for
other services and goods in return.
Coinage
These factors led to the metal itself being
the store of value: first silver, then both
silver and gold, and at one point also
bronze. Now we have copper coins and
other non-precious metals as coins.
Paper money
It began as a means for merchants to
exchange heavy coinage for receipts of
deposit issued as promissory notes by
wholesalers' shops.
Factors affecting Currency
• Inflation Rates
• Interest Rates
• Country’s Current Account / Balance of Payments
• Government Debt
• Terms of Trade
• Political Stability & Performance
• Recession
• Speculation
• Trade balances
• Foreign direct investment (FDI)
• Portfolio investment
• Interest rate differentials
How does Law of Supply and Demand affect the
currency of a country?
The supply of foreign exchange stems from foreign demand for
U.S. dollars. When people or businesses in another country wish to
purchase American products, they purchase dollars with their
currency in order to have the dollars to buy the goods. Their
increase in demand for dollars will be matched by an increase in
supply of their currency. A significant increase in the overseas
demand for US products will have the effect of driving up the
value of the dollar vis-a-vis the other currency. Until 1971,
exchange rates were heavily controlled by central banks, but
since then they have “floated,” with very limited intervention
from governments.
 Examples
Suppose that the exchange rate for the euro is 1 euro = $1. If the U.S.
economy drifts into recession and interest rates fall along with the
stock market, then Europeans will find U.S. investments to be less
desirable, while Americans will find European investments more
desirable. European demand for the dollar will fall at the same time
American demand for the euro increases. The shift of capital from
American to European markets will cause the price of euros to rise,
creating a higher rate of exchange, which might be 1 euro = $1.35.
It's all a matter of supply and demand.
CurrenCy’s Impact on the Economy
• Merchandise Trade
This refers to a nation’s international trade
or its exports and imports. In general
terms, a weaker currency will stimulate
exports and make imports more
expensive, thereby decreasing a nation’s
trade deficit (or increasing surplus) over
time.
• Economic Growth
The basic formula for an economy’s GDP is:
GDP=C+I+G+(X−M)
where:
C=consumption or consumer spending, the biggest
component of an economy
I=capital investment by businesses and households
G=government spending
(X−M)=exports - imports, or net exports
From this equation, it is clear that the higher the value of net exports,
the higher a nation’s GDP. As discussed earlier, net exports have an
inverse correlation with the strength of the domestic currency.
PH Exchange rate as of June 27,2019
Philippine Peso 1.00 PHP inv. 1.00 PHP
Australian Dollar 0.027924 35.811947
Bahraini Dinar 0.007354 135.988088
Botswana Pula 0.207643 4.815966
Brazilian Real 0.074940 13.343964
British Pound 0.015436 64.782930
Bruneian Dollar 0.026474 37.772383
Bulgarian Lev 0.033642 29.724516
Canadian Dollar 0.025613 39.042844
Chilean Peso 13.294723 0.075218
Philippine Peso 1.00 PHP inv. 1.00 PHP
Chinese Yuan Renminbi 0.134496 7.435145
Colombian Peso 62.536295 0.015991
Croatian Kuna 0.127252 7.858433
Czech Koruna 0.437772 2.284294
Danish Krone 0.128400 7.788145
Emirati Dirham 0.071825 13.922810
Euro 0.017201 58.136099
Hong Kong Dollar 0.152842 6.542705
Hungarian Forint 5.567533 0.179613
Icelandic Krona 2.437705 0.410222
Indian Rupee 1.350571 0.740428
Indonesian Rupiah 276.539034 0.003616
Iranian Rial 821.221176 0.001218
Philippine Peso 1.00 PHP inv. 1.00 PHP
Israeli Shekel 0.069880 14.310343
Japanese Yen 2.107617 0.474470
Kazakhstani Tenge 7.421628 0.134741
Kuwaiti Dinar 0.005935 168.492314
Libyan Dinar 0.027282 36.653606
Malaysian Ringgit 0.081039 12.339733
Mauritian Rupee 0.695453 1.437911
Mexican Peso 0.374622 2.669356
Nepalese Rupee 2.171042 0.460608
New Zealand Dollar 0.029194 34.253269
Norwegian Krone 0.166577 6.003233
Omani Rial 0.007520 132.981849
Pakistani Rupee 3.197635 0.312731
Philippine Peso 1.00 PHP inv. 1.00 PHP
Polish Zloty 0.073122 13.675823
Qatari Riyal 0.071189 14.047121
Romanian New Leu 0.081249 12.307826
Russian Ruble 1.233672 0.810588
Saudi Arabian Riyal 0.073340 13.635072
Singapore Dollar 0.026474 37.772383
South African Rand 0.277161 3.608005
South Korean Won 22.634876 0.044180
Sri Lankan Rupee 3.453638 0.289550
Swedish Krona 0.181513 5.509245
Swiss Franc 0.019096 52.365801
Taiwan New Dollar 0.606900 1.647718
Thai Baht 0.602353 1.660155
Philippine Peso 1.00 PHP inv. 1.00 PHP
Trinidadian Dollar 0.132528 7.545572
Turkish Lira 0.113026 8.847547
US Dollar 0.019557 51.131521
Venezuelan Bolivar 0.195330 5.119552