currency valuation

[eShA]

hi to all.\

i hav a question regarding currency valuation and the q is
y the japenese currency have a very low value ($ 1= rs. 60.02= yen 140) even though they have more better economy as compare to pakistan.. more better GDP level. leadin automobile indutry and electrnoic.. then wht could be the possible reason to this ?

regard,,,,
eShA


Although this may seem a paradox, all exact science is dominated
by the idea of approximation.

[Ice_Blue]

the low exchange rate gives Japansese an edge over the other producers of the same product. china has also been using this trick for quite some time.

the exchange rate of a country has no <b>"DIRECT"</b> relationship with the GDP level. however an exchange rate that is low and consistent can boost the country's exports.

the drawback is that a low exchange rate will increase the cost of imports and if the demand for imports is inelastic the inflation level will rise. Paksitan is a case in point where Petroleum and Machinery are inelastic imports and make the major portion of the imports. the consistently falling rupee value is fuelling the inflation which ultimately has bad impacts on the economy.

Thank you very much indeed for asking this interesting question.

Regards,

Ice Blue

[Pracs]

Just to add on to the historic prespective of the de decimalisation of the Japanese Currency - apropos the Second World war ! Quite opposite is the case of Israel who have since 1948 twice decimalised their currency i.e simply took of a zero and issued new denomination for the old ones. Like A new Rs.10 note for every Rs, 100 note...

[eShA]

salam and thanks for assistence..

well tell me how these standerd are set like $1 = rs. 60 for instance.

and plz do provide more info on jap. currency valuation .. by discussing the purchasing power parity and other influencing factors??

regard,,,,
eShA


Although this may seem a paradox, all exact science is dominated
by the idea of approximation.

[Ice_Blue]

please be more specific.

Ice Blue