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    Grade 11 Foreign Exchange

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    londekamkhize693

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    © All Rights Reserved
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    Grade 11 Foreign Exchange

    Uploaded by

    londekamkhize693
    27 views17 pages

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    Copyright:

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    27 views17 pages

    Grade 11 Foreign Exchange

    Uploaded by

    londekamkhize693

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 17

    FOREIGN EXCHANGE

    E. Ferreira (SES: Services Subjects, NMB District)


    GROSS DOMESTIC PRODUCT

    The GDP is…


    • If GDP is rising,
    the economy is
    good, and the
    nation is moving
    forward
    • If GDP is down,
    the economy is in
    trouble and the
    nation is losing
    The GDP is used to measure ground
    economic progress in a country.
    •The multiplier effect
    is when money, spent
    by tourists, filters
    The Multiplier Effect down through the
    economy benefitting
    other organisations
    The buying power of
    the Rand
    • The amount of foreign currency you
    can buy with your Rand is referred
    to as the buying power of the rand.
    • If the rand can buy a lot of the other
    currency, we say the rand is strong
    in relation to the other currency.
    • If the rand can only buy a little of a
    particular currency, we say that the
    rand is weak in relation to that
    particular currency.
    If the Rand is strong
    • The foreign tourists will receive less
    Rand’s for their currency
    • Foreign tourists will have less money to
    spend
    • Inbound tourists will visit for a shorter
    period or will not visit at all
    • Tourism will contribute less to South
    Africa’s GDP and the economy will
    decline
    • Can lead to job losses
    If the Rand is weak
    • More inbound tourists will visit SA
    • Foreign tourists get more Rand’s for
    their currency
    • Foreign tourists have more money to
    spend during their visit
    • Foreign tourists will visit for longer
    periods
    • This will lead to an increase in the
    GDP and will have a positive impact
    on the economy
    • It can lead to job creation
    • A currency rate
    sheet is a list of the
    rates of exchange
    (RoE) at which
    foreign currencies
    are bought and sold.
    • This rate will
    determine how
    much foreign
    currency you will
    receive, when you
    exchange your
    Currency rate sheet money.
    Currency rate sheet

    • Foreign currencies are


    displayed by a three-letter
    code the first two letters refer
    to the country code and the
    3rd to the currency
    • Most currencies also have a
    symbol to indicate the currency
    INTERPRET A CURRENCY RATE SHEET
    CURRENCY CODE SYMBOL EXCHANGE
    RATE
    US Dollar USD US$ 14,94
    British Pound GBP
    Pound sterling
    ₤ 19,21

    Euro EUR € 16,45


    Australian AUD AU$
    dollar 10,23

    Japanese Yen JPY ¥ 0,14


    • Bank Selling Rate:
    The rate at which the
    Bank Selling Rate foreign exchange
    dealers e.g.
    vs commercial banks, will
    Bank Buying Rate sell foreign currency

    • Bank Buying Rate:


    The rate at which the
    foreign exchange
    dealers e.g.
    commercial banks, will
    buy foreign currency
    When doing What is the Bank doing
    a foreign with the foreign currency?
    exchange
    calculation Is the bank selling foreign
    always look currency? (BSR)
    at it from
    the Bank’s Is the bank buying foreign
    position currency? (BBR)
    BSR

    BBR
    CONVERT MAJOR CURRENCIES
    1. From ZAR to a major foreign currency:
    DIVIDE by Rate of Exchange
    R150 to USD:
    R150 ÷ 14,95
    = USD10.0334448
    = USD10,03

    2. From major foreign currency to ZAR:


    MULTIPLY by Rate of Exchange
    £150 to ZAR:
    £150 x 19,21
    = R2881.50

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