Consider the following statements:
The price of any currency in international markets is decided by the
- World Bank
- Demand for goods/services provided by the country concerned.
- Stability of the Government of the concerned country
- Economic potential of the country in question
Which of these statements are correct?
-
1, 2, 3, 4
-
2, 3
-
3, 4
-
1, 4
B
Correct answer
Explanation
Currency prices in international markets (exchange rates) are primarily determined by demand for the country's goods and services (exports) and government stability (which affects investor confidence and economic policy). The World Bank does not decide currency prices - it's a development institution, not a forex market regulator. Economic potential is a factor but is reflected in demand and stability rather than being a separate determinant.