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Replace Currency from the Supply Agreement

Replace Currency from the Supply Agreement

Aug 6th, 2022

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Got questions?

Below are some common questions from our customers that may provide you with the answer you're looking for. If you can't find an answer to your question, please don't hesitate to reach out to us.

What is a currency swap agreement?

Currency swaps are financial contracts between two parties to exchange a specific amount of one currency for an equivalent amount of another currency. The purpose of currency swaps is to reduce currency risk, achieve lower financing costs, or gain access to a foreign currency.

What changes the supply of a currency?

If rates of return in a country look relatively high, then that country will tend to attract funds from abroad. Conversely, if rates of return in a country look relatively low, then funds will tend to flee to other economies. Changes in the expected rate of return will shift demand and supply for a currency.

What is it called when you change on currency for another?

Currency substitution is also known as dollarization when the U.S. dollar (USD) is the currency that is being used as a substitute. Currency substitution is commonly motivated by the need for a more stable monetary unit or in countries that are too small to capture the economies of scale of having their own currency.

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