vaihtokursseista

Vaihtokurssi, known in English as an exchange rate, is the value of one country's currency expressed in terms of another country's currency. It determines how much of one currency you can get for a given amount of another. For example, if the exchange rate between the Euro and the US Dollar is 1 EUR = 1.10 USD, it means that one Euro can be exchanged for 1.10 US Dollars.

Exchange rates are constantly fluctuating due to various factors, including economic conditions, interest rates, political stability, and market speculation. These fluctuations can significantly impact international trade, tourism, and investment. For businesses engaged in import or export, changes in exchange rates can affect the cost of goods and the profitability of their operations. For tourists, a stronger domestic currency makes travel abroad cheaper, while a weaker currency makes it more expensive.

There are two main types of exchange rate systems: fixed and floating. In a fixed exchange rate system, a country's government or central bank pegs its currency's value to another currency or a basket of currencies. This provides stability but can limit a country's ability to respond to economic shocks. In a floating exchange rate system, the currency's value is determined by supply and demand in the foreign exchange market, allowing for greater flexibility but also leading to more volatility. Most major economies today operate with floating exchange rates, though some may intervene occasionally to manage extreme fluctuations.