Exchange-rate quotation, prices and regimes
- Nominal exchange rates require an explicit quotation direction
- Real exchange rates compare goods prices in a common currency
- Depreciation and appreciation depend on the currency being measured
- Devaluation and revaluation change an official parity
- Pegged regimes target a currency value or band
- Floating regimes let market forces determine the exchange rate
- Managed floating uses intervention without a fixed parity commitment
- Purchasing-power parity is a price-comparison benchmark
- Cross rates connect two quotations through a third currency
- Foreign-exchange demand and supply respond to trade and asset transactions
- Nominal effective rates combine bilateral exchange-rate movements
- Real effective rates adjust a nominal basket for relative prices
- An effective-rate index level is relative to its base year
- Import-price pass-through depends on pricing decisions and lags
- Trade-balance effects depend on prices, quantities and adjustment time