I think the best way to understand this is: if you are the owner of the one currency, are you any better off purchasing another currency vs sticking to your own? If your currency depreciates and the price of a basket of goods in your country in relation to another doesn't change, then you get less benefit by converting to the other currency. But if your currency depreciates WHILE inflation increases faster in your country relative to another country (e.g. your currency can buy half as much of another currency, but inflation doubles) => you are no more or less better off converting currencies and therefore the real exchange rate stays the same.
Hi, great video, but i had a question. How did you get the values of 100 USD and 800 pesos? Is that just a given number? or are you finding that out from the nominal exchange rate?
Machaxx teaching frl.
I think the best way to understand this is: if you are the owner of the one currency, are you any better off purchasing another currency vs sticking to your own? If your currency depreciates and the price of a basket of goods in your country in relation to another doesn't change, then you get less benefit by converting to the other currency. But if your currency depreciates WHILE inflation increases faster in your country relative to another country (e.g. your currency can buy half as much of another currency, but inflation doubles) => you are no more or less better off converting currencies and therefore the real exchange rate stays the same.
Needed this, thanks so much for the knowledge. This is super relevant right now
Thank you 🙏🏻🙏🏻🙏🏻
Thankyou so much for this video
thank you, very comprehensive
Nice One
beautifully explained
Great information sir👏
It's helpful
really well done
Thank you very much, I tried to figure out this for long time, now I understood clearly , thank you
Hi, great video, but i had a question. How did you get the values of 100 USD and 800 pesos? Is that just a given number? or are you finding that out from the nominal exchange rate?