Exchange rates, the importance for the country economy and currency wars

In this study, exchange rate, exchange rate and currency wars mentioned was the importance of respect for the country's economy. The definition of the exchange rate of the different and various aspects have been discussed in the first section and importance. The first part of the definition of the exchange rate system of our study is that any foreign currency, especially the proportional value of the national currency against a strong currency. Currency exchange is closely related to the economy, with inflation and interest rates at the same time is extremely important for the country's economy, including inflation and interest rates is. One result is variable. Demand for foreign currency exchange rate rise in longer. Many factors exchange rate the importance they exchange supply of determining the demand for foreign currency, the exchange rate with the expectations and speculation inflation in the country, recession expectations, external debt burdens of confidence in the economy to politics, international factors such as international or regional cyclical developments are related to the exchange rate value.Exchange rate exchange rate regime as well as what is important. To flexible exchange rate regime from a fixed exchange rate, the exchange rate regime with a broad range of intermediate regimes are seen. Despite the number of countries that have adopted flexible exchange rate regime in recent years, the apparent observed increase most still half the world's countries with fixed or supervised or controlled (managed) exchange continues its rate regime (Shatz and Tarr, 2000). The purpose of the exchange rate system mentioned is due to this reason. The purpose of war or a country's currency using the exchange rates of the countries are working to ensure their economic advantage. So, the intent is actually to create commercial advantage which can not be reached through import restrictions or export subsidies economy. Other economies are trying to create advantage against him. This is called in the literature "is begging neighbor 'policy is. 'Neighbor leaning' meaning 'Beggar Thy Neighbour' policy before tariffs, quotas, current exchange rate value is provided through subsidies and is done by creating superior to themselves in favor of using variables that affect it. This policy of export promotion and import restrictions or road passes through as efforts to outflank its superiority against other economies through foreign trade. If an economy keeping the level required by the money of its shareholders trade their money selling them more products and aims at taking less goods than they then reveal neighbor begging policy in a currency war.The aim of this study in an objective way to explain this concept is to make the reviews under the present economic conditions of the issue. Thus flexible exchange rate system known as the exchange rate regime will be seen really not implemented as described in the literature. In this regard, the exchange rate and foreign trade in the kinds of indirect effects in terms of intervention today constitute the essence of this thesis.