Exchange rate calculator

Introduction An exchange rate calculator functions by applying money exchange rate to some amount given in one currency to avail the amount in the other currency. The calculator is used in the foreign exchange market which is divided into four regimes namely: Fixed exchange rate- the calculator cannot be used in this regime because the government fixes the rate of exchange between the domestic currency and the foreign currency and interferes incase it drops or falls beyond the fixed rate of exchange just to maintain it thus it is always fixed. ii. Flexible exchange rate- The calculator can be used at this regime because the rate of exchange between the domestic and foreign currencies depends on demand and supply thus it is flexible and varies from time to time. iii. Floating exchange rate- this is the regime where the rate of exchange between the domestic currency and the foreign currency depends on the foreign exchange market, the calculator can also be applied in this regime because its not fixed and is capable of changing. iv. Linked exchange rates-this is a regime where the domestic currency is linked with another currency such that the value depends on the foreign currency in this regime a rates calculator can be used through calculating the value of the foreign currency. It is mostly used by international businessmen and travelers to enable them know or determine the right time to carry out their transactions by taking advantage of the always changing currency rates of exchange in the international money market especially when they are favourable to them Merits of using exchange rate calculator It s far much faster because one just needs to do some few clicks and the value is given compared to the traditional ways of calculating which are more tedious and consume a lot of time. ii. It assists a person to automatically convert one currency to another currency with no much manual work needed. iii. It is used to determine which one of the involved currencies is more valuable than the other so that it helps determine whether exchanging the currencies will be favourable by considering the rates of interest. iv. It assists people entering into expensive transactions to wait for the right time to carry them out to avoid them from incurring huge losses through high rates of exchange. i. i.

v. The calculators are readily available on the internet hence one does not need to have it physically for one to use it to use it thus it is readily available. Demerits of using the exchange rate calculator i. Currency fluctuations . Currency fluctuations takes place in a very short time that the rates of currency exchange might be low this time and they shoot up in five minutes in other words its unpredictable thus we cannot rely heavily on the calculators as the rates keep changing by time. ii. Inadequate e-commerce systems. Due to poor e-commerce systems some rate calculators are not kept up to date you may find a calculator using rates that were existing a month ago, this leads to misinformation about what is going on in the current exchange rate market thus sometimes people opt for manual rate calculations.

Conclusion Exchange rate calculators are useful because they have more merits than demerits and they are quite useful especially to international traders and tourists they are also fast and are also available on the web hence are readily available anywhere as long as there is an internet connection.

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