How is the currency value or worth determined?
1) Printing of notes and bills:
· The excessive amount of currency printed means that the value is decreasing.
· The more the notes and bills the lesser the values.
· Well, the more you have the less its is worth, it s general rule
· No matter it is iron ore, crude oil, coal, gold, silver and platinum.
· So this means that the larger the amount of bills and notes circulated the lesser the value is.
2) Current State of the Economy:
If the economy is good then the value is good, if the economy is bad the value is bad. If there is South korean economy more unemployment then the people who want are more and who give are less, who need are more and who earn are less. So, this also means the economy is bad. High unemployment, decrease consumer spending, with a decrease in business expansion, means a poor economy and a decrease in currency value.
3) Prices of Foreign Goods:
It is also one factor that makes it possible to determine the value of the currency, the price or the exchange rate. Well, if there is the foreign company that sells goods and stuff which are cheaper than already sold in that country, this means that people will buy that foreign product and that will surely hurt the economy. A poor economy results in a decrease in demand for that countries currency. And if the demand of that country’s notes is less in the international market then of course the rate will fall.
4) Political Conditions of a Country:
If the political state is better and the economy is good then it value is good. The strong politics and a good government mean that there are no chaotic situations in the country and it is stable and a good country.