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Question : Which of the following factors does not affect foreign exchange rates?

Option 1: Inflation rates
 

Option 2: Interest rates
 

Option 3: Political stability

 

Option 4: Weather conditions


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

Correct Answer: Weather conditions


Solution : Foreign exchange rates are affected by various economic and political factors, including inflation rates, interest rates, and political stability. However, weather conditions are not directly related to foreign exchange rates. While severe weather events or natural disasters can have an impact on a country's economy, this impact is usually indirect and is mediated through other economic factors. For example, a severe hurricane may disrupt a country's oil production, which could lead to changes in inflation rates or interest rates and ultimately affect the country's exchange rate.

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