Question

What three factors influence the value of a country’s currency?

Answer 1

Economics conditions, political stability and balance of payments 3

Answer 2

Step-by-step explanation:

The three main factors that can affect the currency of a country are:

1. Economic Conditions: The economy of the country directly affects the currency of the country. There are many factors that may influence the appreciation or depreciation of the country's currency. These factors may include Inflation, GDP, Unemployment Rate, Non Farm Payroll, etc. With the increase or decrease of important indicators, the currency would appreciate or depreciate accordingly.
2. Political Conditions: With the stability in politics, the currency also stays stable and if there is a instability in the political environment, the currency is also affected in a negative way usually.
3. Balance of Payments: It is the difference between the amount of money transacted out of the country and the amount of money transacted into the country. The currency is also dependent upon the result of this factor.