The influence of the national cis deficit on the national balance of payments refers to the systematic record of the total balance of payments produced by all economic transactions conducted by a country with foreign countries in a certain period.
It is an important factor in short-term change.
When the balance of payments is in surplus and demand exceeds supply, the ratio of foreign currency to domestic currency will fall.
When there is a deficit in the balance of payments, the domestic debt payable in currency is greater than the debt receivable in currency, the foreign exchange supply exceeds the demand, the ratio of foreign currency to domestic currency rises, and the domestic currency depreciates in the balance of payments.
In the balance of payments, international trade data is more important.
If it continues to grow, international market confidence in and demand for the domestic currency will increase, leading to an increase in the exchange rate;
Instead, as the huge amount continues to grow, market confidence and the demand for money will fall, eventually leading to.
A sustained deficit or sharp increase in foreign trade figures has the greatest impact on market psychology.
People’s psychological expectations affect the foreign exchange market A country’s currency tends to rise and fall in response to people’s expectations.
The impact of these artificial factors on exchange rates is sometimes even more pronounced than the impact of economic factors.
Therefore, economists, financial experts, analysts, traders and investors often publish their comments and forecasts and express their views on the exchange rate trend according to the daily international events. Political factors influence the foreign exchange market. Political factors and economic factors are inseparable.
Whether a country is politically stable or not will have a significant impact on its economy, especially its.
Whether it is a military conflict or a political scandal, it will leave important traces in the foreign exchange market.
The central bank influences the foreign exchange market because the exchange rate level of a country’s currency often affects the country’s international trade, economic growth rate, currency supply and demand, and even political stability. When the speculative forces in the foreign exchange market seriously deviate the national exchange rate from the normal level, the national central bank often intervenes in the market.
The four ways to deal with speculators in the foreign exchange market are: 1. Directly buy or sell your own currency or other currencies in the foreign exchange market;
2. Strengthen the domestic currency;
3. Tighten domestic currency credit and prevent domestic currency outflow;
4. Issue a statement.
By doing so, central banks made it much more expensive for speculators to fund themselves in the foreign exchange market, forcing them to cut their losses and close out their positions, which brought the exchange rate back to a reasonable level.
Of the four methods mentioned above, central bank intervention in the foreign exchange market has the most pronounced short-term effect, which is often the cause of large exchange rate fluctuations.