vaihtosuhteisiin

Vaihtosuhde, often translated as exchange rate, refers to the value of one currency in relation to another currency. It is the price at which one currency can be exchanged for another. For example, if the exchange rate between the US dollar and the Euro is 1 EUR = 1.10 USD, it means that one Euro can buy 1.10 US dollars.

Exchange rates are determined by the foreign exchange market, which is a global decentralized market for the trading of currencies. The market is influenced by various factors, including supply and demand for currencies, interest rates, inflation, political stability, and economic performance.

There are different types of exchange rates. The spot exchange rate is the rate for immediate delivery of currencies. The forward exchange rate is a rate agreed upon today for delivery of currencies at a future date. Fixed exchange rates are set by governments or central banks, while floating exchange rates are determined by market forces.

Exchange rates play a crucial role in international trade and investment. They affect the cost of imports and exports, the profitability of foreign investments, and the overall competitiveness of a country's economy. Fluctuations in exchange rates can create both opportunities and risks for businesses and individuals involved in international transactions. Central banks often intervene in the foreign exchange market to manage their currency's exchange rate, especially under a fixed or managed float regime.