Contest- Currency swap (Economic issues contest)
This is will be my first official contest on steemit. The major aim is to know how people think or what they what.
The topic is CURRENCY SWAP.
The main requirements are :
1- what do you understand by currency swap?
2-What are the advantages to both parties engaged in it ?
3-can you think of any disadvantages ?
4- what is your opinion on the issues?
You can read this to help you
https://steemit.com/currencyswap/@oclinton/currency-swap-what-you-need-to-know-about-currency-swap-between-nigeria-china
All the answer should be in the comments box.
RULES:
1-The requirements is simple just upvote and resteem for others to participate.
2-One entry per person.
3- No confrontation with others view.
REWARDS.
For this is my first contest the rewards will be given by @steem-bounty for everyone who participate.
If it should go as expected the next rewards will be re-organised and will increase .
Please upvote , resteem and then comment your answer.
Thanks.
Oclinton
I just looked very happy. My hapiness only lasted less than 1 second. Cause after I received a small upvote it was almost directly removed.
What/why happened?
you received an up vote from danlupi with voting power of 20.88%. Estimated dollar amount of $0.68
Is it from me
1: two parties (mostly companies) switching a certain amount of money in two currencies for a certain period. Normally they pay each other the interest difference between the 2 currencies.
2: no exchange rate risk.
3: sometimes the second party is just a counter party like a bank. In that case there is a credit risk that the counter party goes bankrupt.
4: I don't know. I hope this is not the most important question?
Its a great thing to have the exchange rate locked in a swap :>
Upvoted and resteemed as a request.
Later, I’ll reply to the questions, because now I’m walking with “”my” dogs 🐕 🐩 🐶 (I’m a kind of dog-sitter😜)
For now, thanks and congratulations for your first contest! 🙏🏻
A big friendly hug from a @amico! 🤗
Ok remember to comment your answer after walking with your dog lol
El intercambio de divisas es, el intercambio de monedas por otra. Las ventajas y objetivos de estos intercambios de divisas consiste en disponer de divisas extranjeras para realizar compras o pagar prestadores de servicios sin tener que sufrir gravámenes suplementarios. Por ejemplo, una empresa americana que compra materias primas en Europa, podrá intercambiar divisas con una empresa francesa que subcontrata una parte de su producción en los Estados Unidos. De esta manera, cada una de las partes gana con ello.
I am going to learn about it then I will come back
Ok
1- what do you understand by currency swap?
Two parties exchange different currencies, for example US Dollar and Euro. At the beginnig they exchange the currencies at the current exchange rate , for example 1,18 US-Dollar/Euro. During the running time each party has to pay the the other party interest in the currency they got .
At the end they exchange the currencies back, at the same rate they used at the beginning, here 1,18 US Dollar. I does not matter if the excange rate changed during the running time of the currency swap.
2-What are the advantages to both parties engaged in it ?
Both parties get the foreign currency they need to make business in another country and they can do it without the risk of making a loss when the exchange rates changes during the running time.
3-can you think of any disadvantages ?
One disadcantages is that you can't profit from a better exchange rate at the end of the running time of the currency swap.
4- what is your opinion on the issues?
I think currency swaps are a good instrument. It's not the job of a normal company to predict the future exchange rate of a currency. It helps to reduce the currency risk for the company.
Not to so easy to describe a currency swap in english :D
Nice one.
I like your opinion
1- What do you understand by currency exchange?
The word itself says, "exchange", in this case it is usually done between two countries. In which both obtain benefits. It is to find a way to give a value to each of these currencies in relation to the other, considering the stability of each one in the world market.
In a certain way it is what is done with the cryptocurrencies, since we exchange a cryptocurrency for another, in this case using the price of the BTC as reference.
2-What are the advantages for both parties involved in it?
There is always going to be a benefit for both, but I think there will be a more solid currency than the other, "economically speaking". and the one with the lowest value will benefit the most. I believe.
The main advantage I would say is the fact of improving commercial relations between both parties, having a positive effect on the ease of negotiations between both countries.
3-Can you think of any disadvantage?
It may be that the country, whose currency is of greater commercial value, take advantage of this and indirectly make a decrease in the value of the other currency ... These economic issues are comlejos, really that if, for sure you would not know give what maneuvers take advantage of one over the other.
4- What is your opinion about the problems?
The problems in general, in life, are to look for solutions hehehe
In this particular case the problems can be avoided if the governments, the states, who make those decisions, not only think about the economic but also the social repercussion of that, because those who are in power are not affected by that, they and their relatives will never go hungry, but the most unprotected classes are the ones who have the most impact on those changes, if they are not well taken care of, well planned.
However, all this must be contextualized, since in the case of my country, dollarization would be a good measure, something that the government does not want. Maybe in other countries it is not convenient at all, if they have a higher value currency, like the euro for example.
Thanks for this topic @oclinton, I had never sat down to think about it.
Please do resteem the post
ready @oclinton, I already made the resteem of your post. :-)
Thanks
Thank you for participating
Well done @oclinton! You successfully guessed the match result.
Click on the badge to view your Board of Honor.
Do you want to know your current ranking? Read this post
Do not miss the last post from @steemitboard:
SteemitBoard World Cup Contest - Quarter Finals - Day 1
You got a 3.04% upvote from @emperorofnaps courtesy of @oclinton!
Want to promote your posts too? Send 0.05+ SBD or STEEM to @emperorofnaps to receive a share of a full upvote every 2.4 hours...Then go relax and take a nap!