Final answer:
You should not use the currency exchange rate from a previous wire transfer because currency values change frequently, and relying on a past rate could lead to inaccuracies. The Brazilian government may set a higher official rate than the market to control economic factors like inflation. The U.S. banking system faces less risk from exchange rate fluctuations since international loans are often in U.S. dollars.
Step-by-step explanation:
Regarding whether you should use the currency exchange rate from a previous wire transfer, the most accurate approach would be to consider current market rates. Currency values fluctuate frequently, so relying on a past rate could result in inaccuracies in financial calculations. When it comes to exchange rate determination, as per the provided information, scenarios such as the Brazilian government preferring a stronger exchange rate than the market to combat inflation are common. They might set a higher official rate to aid in their economic strategies.
Regarding the economic impact of exchange rate fluctuations on the banking system, it's important to understand how banks handle international loans and currency conversions. For example, a Thai bank borrowing in U.S. dollars would have to be cautious about the exchange rate between the dollar and the baht upon borrowing and repayment, making the operations susceptible to rate changes. This can be particularly problematic when the domestic currency depreciates against the dollar, increasing the cost of loan repayment.
The U.S. banking system is generally less affected by these fluctuations as most international loans are measured in U.S. dollars. This means that U.S. banks typically do not face the same currency risk when borrowing internationally and lending domestically since the transactions often remain in the same currency, avoiding the need for conversion.