equilibrium exchange rate


The exchange rate at which the supply for a currency meets the demand of the same currency. As foreign exchange rates are affected by a number of factors, the equilibrium exchange rate in turn, are also influenced by its supply and demand. Hence equilibrium is achieved when a currency's demand is equal to its supply.

Use this term in a sentence

You should always try and make sure that you are on the right side of the equilibrium exchange rate to save money.


The equilibrium exchange rate was not being met so there was an opportunity of arbitrage in the currency trading market.


We were studying currency plays and noting the equilibrium exchange rate before we made any hard choices on which markets to enter.


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equilibrium equilibrium price