Weakening currency: A currency trader works near the screens showing the foreign exchange rate between US dollar and won in Seoul. South Korea’s consumer price inflation has been on a clear downward path since hitting its peak in the middle of 2022. — AP
THE foreign exchange rate is an important price variable not just in the sense that it influences a wide range of economic activities such as exports and imports, but because it is often taken as reflecting the comparative strength of a country’s economic fundamentals against others.
It also influences and is influenced by the country’s macroeconomic policies.
