Increasing the us inflation causes

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Reference no: EM1367531

Describe how the following events would effect market for South Africa's currency, the rand, suppose a floating exchange rate.

a) a rise in the US inflation causes many US residents to seek to buy gold, which is a major South African export, as hedge is against inflation.

The rand appreciates
The rand does not change in value
The rand depreciates

B)Major discoveries of the highest quality diamonds ever found occur in Russia & Central Asia, causing a significant decline in purchases of South African diamonds.

The rand appreciates
The rand does not change in value
The rand depreciates

c)Which of the following 2 events could have generated the decrease in the demand for the baht?

A reduction in foreign purchases of Thai export goods
An increase in foreign purchases of securities issued by Thailand's government
An decrease in foreign purchases of financial services provided by Thai banks.
An increase in foreign purchases of Thai stocks and bonds.

Reference no: EM1367531

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