The Mathematics of Money

470 Chapter 11 International Business

US$ EQUIVALENT CURRENCY PER US$

Country Currency Thursday Wednesday Thursday Wednesday

Jordan Dinar 1.4114 1.4114 0.7085 0.7085

Kuwait Dinar 3.4576 3.4578 0.2892 0.2892

Lebanon Pound 0.0006631 0.0006634 1508.07 1507.39

Malaysia Ringgit 0.2718 0.2721 3.6792 3.6751

Malta Lira 2.9724 2.9799 0.3364 0.3356

Mexico Peso 0.0915 0.0917 10.929 10.9039

New Zealand Dollar 0.6349 0.6398 1.5751 1.563

Norway Krone 0.1575 0.1589 6.3492 6.2933

Pakistan Rupee 0.01658 0.01656 60.314 60.387

Peru New Sol 0.309 0.3091 3.2362 3.2352

Philippines Peso 0.01944 0.01949 51.44 51.308

Poland Zloty 0.3233 0.3249 3.0931 3.0779

Russia Ruble 0.03731 0.03735 26.803 26.774

Saudi Arabia Riyal 0.2666 0.2666 3.7509 3.7509

Singapore Dollar 0.6338 0.6357 1.5778 1.5731

Slovak Rep. Koruna 0.03377 0.03399 29.612 29.42

South Africa Rand 0.1396 0.1396 7.1633 7.1633

South Korea Won 0.0010425 0.0010464 959.23 955.66

Sweden Krona 0.1386 0.1392 7.215 7.1839

Switzerland Franc 0.8067 0.81 1.2396 1.2346

Ta iwan Dollar 0.03045 0.03051 32.841 32.776

Thailand Baht 0.02653 0.02659 37.693 37.608

Tu rkey New Lira 0.6692 0.6768 1.4943 1.4775

UK Pound 1.8869 1.8936 0.53 0.5281

UAE Dirham 0.2723 0.2723 3.6724 3.6726

Uruguay Peso 0.0418 0.0419 23.923 23.866

Venezuela Bolivar 0.000466 0.000466 2145.92 2145.92

EU Euro 1.2758 1.2792 0.7838 0.7817

*The main unit of Chinese currency is the yuan. The term renminbi listed is the term for Chinese currency in general; it

is not a currency unit.

Before this table can be used, some things demand explanation. There are two groups

of columns, one labeled “US$ Equivalent” and one labeled “Currency per US$.” Each

gives the exchange rate, but in different forms. For example, for New Zealand, the “US $

Equivalent” columns tell us that on Thursday NZ$1 was worth US$0.6349. The “Currency

per US$” columns tell us that on Thursday US$1 was worth NZ$1.5751. These are actu-

ally just two different ways of giving the same information, but we will see shortly that it

is useful to have the information available in both forms.

Secondly, notice that in each column group there are two columns, one for Thursday

and one for Wednesday. Most currencies have what are known as floating rates, which

means that their exchange rates are determined primarily or entirely by market forces, and

so can change from day to day (or even moment to moment). The value of the currency

is whatever a willing buyer will give a willing seller. When the demand for a country’s

currency is strong, the value of that currency will tend to rise, and when demand is weak,

the currency’s value will tend to fall. Under normal circumstances, day-to-day and even

minute-to-minute exchange rates fluctuate a bit, but big changes in exchange rates don’t

usually occur quickly. You can see that most of the exchange rates in the table above differ

between Wednesday and Thursday, but that the changes are slight.

A few countries have fixed currencies, where the exchange rate for the currency is set by

the government and exchanging currency at anything other than the official rate is illegal.

TABLE 11.1

(Continued)