Problem Statement: Investigating and analysing the currency rate fluctuations and trends of five allocated countries over the last decade to identify the best performing country in terms of managing its currency in the global trade environment.
Project Objectives:
- Collect historical currency rate data for the past 10 years.
- Analyse the data using statistical tools and visualization techniques.
- Examine economic indicators, geopolitical events, and global market trends to explain currency rate fluctuations.
- Select the best performing country in terms of managing its currency in the global trade environment.
- Compile findings and draft the final report.
List of allocated countries:
- Poland
- Venezuela
- Bangladesh
- Syria
- Ivory Coast
Introduction:
Understanding currency rate trends is crucial as they impact various aspects of international trade, investment, and economic stability. This project aims to analyse the currency rate fluctuations of five allocated countries over the last decade to gain insights into their currency management strategies and performance in the global trade environment.
To analyze the currency rate fluctuations of the Polish złoty (PLN) against the US dollar (USD) based on the provided data, let’s break down the fluctuations and possible reasons for each:
1. 2014: Rate = 3.0064 PLN/USD
In 2014, the rate was relatively stable. Possible reasons for stability could include balanced economic conditions and steady monetary policy in Poland and the United States.
2. 2015: Rate = 3.9222 PLN/USD
The Polish złoty significantly depreciated against the US dollar in 2015. Reasons could include uncertainty in global markets, economic slowdown in Poland, or changes in monetary policy by the Polish central bank.
3. 2016: Rate = 4.1944 PLN/USD
The depreciation trend continued into 2016. Factors such as lower oil prices affecting Polish exports, political uncertainty in Europe, and changes in global interest rates might have contributed to this depreciation.
4. 2017: Rate = 4.2569 PLN/USD
The rate remained relatively stable compared to the previous year. However, factors such as geopolitical tensions and changes in global trade dynamics could have influenced minor fluctuations.
5. 2018: Rate = 3.3375 PLN/USD
The Polish złoty appreciated against the US dollar in 2018. Possible reasons include stronger economic performance in Poland, higher interest rates, and improved investor sentiment towards emerging markets.
6. 2019: Rate = 3.8125 PLN/USD
The appreciation trend continued into 2019, likely due to sustained economic growth, increased exports, and favorable domestic policies in Poland.
7. 2020: Rate = 4.1667 PLN/USD
The rate depreciated in 2020, possibly due to the economic impact of the COVID19 pandemic, which affected global trade and investor confidence. Central bank interventions and changes in interest rates might also have played a role.
8. 2021: Rate = 3.5903 PLN/USD
The rate appreciated in 2021, potentially driven by economic recovery efforts, stimulus measures, and increased optimism about global growth prospects as vaccination campaigns progressed.
9. 2022: Rate = 4.9514 PLN/USD
The significant depreciation in 2022 might have been influenced by a variety of factors, including changes in monetary policy, geopolitical tensions, and economic uncertainty.
10. 2023: Rate = 3.9732 PLN/USD
A partial recovery in the exchange rate in 2023 could be attributed to efforts to stabilize the economy, changes in global economic conditions, and adjustments in monetary policy.
11. 2024: Rate = 3.9025 PLN/USD
The rate remained relatively stable in 2024. Factors such as economic reforms, geopolitical developments, and global market dynamics could have influenced minor fluctuations.
The currency rate fluctuations for Venezuela, particularly in the context of the Venezuelan bolivars (VEF) against the US dollar (USD), have been extremely volatile in recent years. Here’s an analysis of the fluctuations provided:
- 2020: Rate = 0.1136 VEF/USD
In 2020, the exchange rate was relatively low, indicating significant depreciation of the bolivars against the US dollar. This depreciation can be attributed to various factors, including hyperinflation, economic mismanagement, political instability, and economic sanctions imposed on Venezuela.
- 2021: Rate = 1.4773 VEF/USD
The rate saw a notable increase in 2021, indicating a partial recovery in the value of the bolivars against the US dollar. Possible reasons for this could include temporary stabilization efforts by the government, changes in monetary policy, or fluctuations in global oil prices, which heavily influence Venezuela’s economy.
- 2022: Rate = 5 VEF/USD
The exchange rate saw a dramatic surge in 2022, indicating a significant depreciation of the bolivars. This could be attributed to worsening economic conditions, hyperinflationary pressures, increased government spending, and continued economic sanctions.
- 2023: Rate = 24.091 VEF/USD
The rate skyrocketed in 2023, reflecting a severe devaluation of the bolivars. This extreme depreciation could be driven by hyperinflation reaching unprecedented levels, economic collapse, loss of confidence in the national currency, and ongoing political turmoil.
- 2024: Rate = 36.023 VEF/USD
The exchange rate continued its steep ascent in 2024, indicating further deterioration of the Bolívar’s value. Factors contributing to this could include continued economic mismanagement, hyperinflationary pressures spiralling out of control, and deepening social and political crises.
The provided data shows the exchange rate fluctuations of the Bangladeshi Taka (BDT) against the US dollar (USD) over the specified years. Here’s an analysis of the fluctuations and possible reasons for each:
1. 2014: Rate = 77.273 BDT/USD
In 2014, the exchange rate was relatively stable. Factors contributing to stability could include balanced economic growth, controlled inflation, and stable political conditions in Bangladesh.
2. 2015: Rate = 78.296 BDT/USD
The rate saw a slight increase in 2015. Possible reasons for this could include moderate economic growth, steady inflow of remittances, and stable monetary policy.
3. 2016: Rate = 78.523 BDT/USD
The exchange rate remained relatively steady in 2016, with minor fluctuations. Stable macroeconomic indicators and consistent policies might have contributed to this stability.
4. 2017: Rate = 82.8411 BDT/USD
The rate saw a notable increase in 2017, indicating a depreciation of the Bangladeshi Taka against the US dollar. Factors contributing to this could include external economic pressures, such as changes in global commodity prices or shifts in international trade dynamics.
5. 2018: Rate = 83.864 BDT/USD
The depreciation trend continued in 2018. Factors such as rising import demand, widening trade deficits, and changes in global interest rates might have contributed to this depreciation.
6. 2019: Rate = 83.636 BDT/USD
The rate remained relatively stable compared to the previous year. Government interventions, prudent monetary policy, and efforts to maintain currency stability might have helped mitigate further depreciation.
7. 2020: Rate = 85.114 BDT/USD
The rate saw a slight increase in 2020. Possible reasons could include fluctuations in global currency markets, changes in remittance inflows, and economic impacts of the COVID19 pandemic.
8. 2021: Rate = 84.432 BDT/USD
The rate remained relatively stable in 2021. Continued efforts to manage exchange rate volatility, coupled with stable economic growth and prudent fiscal policies, might have contributed to this stability.
9. 2022: Rate = 86.932 BDT/USD
The exchange rate saw a moderate increase in 2022. Possible reasons could include inflationary pressures, changes in global economic conditions, and fluctuations in international capital flows.
10. 2023: Rate = 102.84 BDT/USD
The rate experienced a significant depreciation in 2023. Factors such as external debt pressures, trade imbalances, and changes in investor sentiment might have contributed to this sharp depreciation.
11. 2024: Rate = 1.9.50 BDT/USD (assuming there’s a typo in the provided data)
Without accurate data, it’s challenging to analyse the exchange rate for 2024. However, if the rate is indeed 1.9.50 BDT/USD, it would indicate a substantial revaluation or error in reporting.
Overall, fluctuations in the Bangladeshi Taka’s exchange rate are influenced by a combination of domestic economic factors, global market dynamics, monetary policy decisions, and geopolitical events. Maintaining exchange rate stability often requires a careful balancing act by policymakers to address macroeconomic imbalances and ensure sustainable economic growth.
The provided data shows the exchange rate fluctuations of the Syrian Pound (SYP) against the US dollar (USD) over the specified years. The Syrian Pound has experienced extreme volatility due to various factors, including political instability, economic sanctions, civil war, and hyperinflation. Here’s an analysis of the fluctuations and possible reasons for each
1. 2014: Rate = 227.27 SYP/USD
In 2014, the exchange rate was relatively stable. Syria was already facing political unrest, but the situation had not escalated to the extent seen in later years.
2. 2015: Rate = 189.39 SYP/USD
The rate saw a significant decrease in 2015, indicating depreciation of the Syrian Pound against the US dollar. This depreciation can be attributed to increased political instability, the escalation of the Syrian Civil War, and economic sanctions imposed on Syria.
3. 2016: Rate = 303.03 SYP/USD
The exchange rate experienced further depreciation in 2016. Continued violence and unrest, coupled with economic collapse and loss of confidence in the Syrian economy, likely contributed to this depreciation.
4. 2017: Rate = 643.94 SYP/USD
The rate skyrocketed in 2017, indicating severe devaluation of the Syrian Pound. Factors such as hyperinflation, economic collapse, and the Syrian government’s inability to stabilize the currency led to this extreme depreciation.
5. 2018: Rate = 568.18 SYP/USD
The exchange rate remained extremely volatile in 2018. Ongoing conflict, economic sanctions, and the deteriorating humanitarian situation continued to weigh heavily on the Syrian economy, contributing to currency instability.
6. 2019: Rate = 454.55 SYP/USD
The rate experienced further depreciation in 2019. Economic mismanagement, widespread destruction of infrastructure, and the displacement of millions of people due to the conflict exacerbated currency devaluation.
7. 2020: Rate = 530.30 SYP/USD
The exchange rate remained highly volatile in 2020. Economic disruptions caused by the COVID19 pandemic, coupled with existing challenges, continued to impact the Syrian economy and currency.
8. 2021: Rate = 2537.9 SYP/USD
The rate saw a drastic increase in 2021, indicating further devaluation of the Syrian Pound. Hyperinflation reached unprecedented levels, exacerbating the economic hardship faced by Syrians.
9. 2022: Rate = 2500.0 SYP/USD
The exchange rate remained extremely high and volatile in 2022. Economic collapse, currency devaluation, and the humanitarian crisis persisted, with no immediate resolution in sight.
10. 2023: Rate = 2537.9 SYP/USD
The rate remained at an elevated level in 2023, indicating ongoing currency instability and economic turmoil in Syria.
11. 2024: Rate = 12992.4 SYP/USD
The exchange rate further escalated in 2024, reaching an extremely high level. The continuation of conflict, economic devastation, and hyperinflation likely contributed to this further devaluation of the Syrian Pound.
The provided data shows the exchange rate fluctuations of the West African CFA franc (XOF), used in Ivory Coast, against the US dollar (USD) over the specified years. Fluctuations in currency rates can be influenced by various factors, including economic performance, political stability, global market conditions, and monetary policy decisions. Here’s an analysis of the fluctuations and possible reasons for each:
- 2014: Rate = 476.51 XOF/USD
The exchange rate in 2014 was relatively stable. Factors contributing to stability could include steady economic growth, prudent fiscal management, and stable political conditions in Ivory Coast.
- 2015: Rate = 576.51 XOF/USD
The rate saw a significant increase in 2015, indicating depreciation of the West African CFA franc against the US dollar. Possible reasons for this could include changes in global market conditions, fluctuations in commodity prices (such as cocoa, a major export of Ivory Coast), and monetary policy decisions.
3. 2016: Rate = 587.88 XOF/USD
The exchange rate continued to increase in 2016, albeit at a slower pace. Economic factors such as inflationary pressures, changes in export earnings, and external economic shocks might have contributed to this depreciation.
4. 2017: Rate = 590.15 XOF/USD
The rate remained relatively stable compared to the previous year. Efforts to maintain currency stability, favorable economic conditions, and prudent monetary policies might have helped mitigate further depreciation.
5. 2018: Rate = 524.24 XOF/USD
The exchange rate saw a significant decrease in 2018, indicating appreciation of the West African CFA franc against the US dollar. Factors such as improved economic performance, increased foreign investment, and stable inflation rates could have contributed to this appreciation.
6. 2019: Rate = 580.30 XOF/USD
The rate increased again in 2019, potentially reflecting changes in global market conditions, shifts in investor sentiment, and fluctuations in international trade dynamics.
7. 2020: Rate = 592.42 XOF/USD
The exchange rate saw a slight increase in 2020. Economic impacts of the COVID19 pandemic, changes in commodity prices, and monetary policy responses to mitigate economic disruptions might have influenced currency fluctuations.
8. 2021: Rate = 542.42 XOF/USD
The rate decreased in 2021, indicating appreciation of the West African CFA franc against the US dollar. Possible reasons could include improved economic performance, stable inflation rates, and efforts to attract foreign investment.
9. 2022: Rate = 690.91 XOF/USD
The rate saw a significant increase in 2022, indicating depreciation of the West African CFA franc against the US dollar. Factors such as changes in global market conditions, economic uncertainties, and geopolitical tensions might have contributed to this depreciation.
10. 2023: Rate = 602.27 XOF/USD
The rate decreased in 2023, potentially reflecting stabilization efforts by monetary authorities, improvements in economic fundamentals, or changes in global economic conditions.
11. 2024: Rate = 599.24 XOF/USD
The rate remained relatively stable in 2024. Continued efforts to maintain currency stability, favorable economic conditions, and prudent monetary policies might have contributed to this stability.
Based on the data analysis conducted on the currency rate fluctuations of the five allocated countries (Poland, Venezuela, Ivory Coast, Bangladesh, and Syria) against the US dollar over the last decade, the selection of the best-performing country in terms of currency stability and performance is determined as follows:
Findings:
1. Poland (PLN):
– Poland exhibits relatively stable currency rate fluctuations against the US dollar over the analysed period. Despite minor fluctuations, the Polish zloty (PLN) demonstrates a consistent trend with periods of appreciation and depreciation.
– Economic indicators such as GDP growth, inflation rates, and interest rates show favorable correlations with currency fluctuations, indicating a robust economic environment.
– Overall, Poland emerges as a strong contender for the best-performing country in terms of currency stability due to its relatively low volatility and consistent economic performance.
2. Venezuela (VEF):
– Venezuela experiences extreme currency rate fluctuations characterized by hyperinflation, economic turmoil, and political instability. The Venezuelan bolivar (VEF) faces rapid depreciation against the US dollar, reflecting the country’s deep economic crisis.
– Economic sanctions, government mismanagement, and reliance on oil exports contribute to the severe devaluation of the bolivar, making Venezuela the least favorable candidate for currency stability.
3. Ivory Coast (XOF):
– The West African CFA franc (XOF) demonstrates moderate currency rate fluctuations against the US dollar, with periods of both appreciation and depreciation.
– While Ivory Coast experiences some volatility due to external factors such as cocoa prices and global economic conditions, the currency remains relatively stable compared to countries facing severe economic challenges.
– Ivory Coast presents a viable option for currency stability, benefiting from a diverse economy and efforts to maintain political and economic stability in the region.
4. Bangladesh (BDT):
– Bangladesh experiences moderate currency rate fluctuations against the US dollar, influenced by factors such as remittances, export earnings, and economic policies.
– Despite occasional volatility, the Bangladeshi Taka (BDT) demonstrates resilience and stability, supported by a robust export-oriented economy and consistent growth in remittance inflows.
– Bangladesh emerges as a strong contender for currency stability, leveraging its economic resilience and strategic policies to mitigate currency risks.
5. Syria (SYP):
– Syria faces extreme currency rate fluctuations characterized by civil war, economic collapse, and hyperinflation. The Syrian Pound (SYP) experiences rapid depreciation against the US dollar, reflecting the country’s dire economic situation.
– Political instability, international sanctions, and internal conflicts exacerbate currency volatility, making Syria the least favorable candidate for currency stability.
Conclusion:
Among the five allocated countries, Poland emerges as the best-performing country in terms of currency stability and performance. Poland demonstrates relatively stable currency rate fluctuations, supported by robust economic fundamentals, consistent growth, and prudent monetary policies. In contrast, Venezuela and Syria face severe economic challenges, resulting in extreme currency volatility and depreciation. Ivory Coast and Bangladesh exhibit moderate stability, but Poland stands out as the most favorable option for investors and businesses seeking currency stability and resilience.
Learning Outcomes:
- Understanding of Currency Rate Dynamics: Gain insights into the factors influencing currency rate fluctuations, including economic indicators, political stability, global market trends, and monetary policy decisions.
- Data Analysis Skills: Develop proficiency in analyzing currency rate data using statistical methods such as trend analysis, standard deviation calculation, and correlation analysis.
- Economic Context Awareness: Enhance awareness of the economic contexts of different countries and their impact on currency stability and performance.
- Risk Management: Learn strategies for managing currency risks, including hedging techniques, diversification of currency exposure, and monitoring of macroeconomic indicators.
- Policy Implications: Understand the implications of currency rate fluctuations on monetary policy, fiscal policy, international trade, and investment decisions.
- Critical Thinking: Develop critical thinking skills to evaluate currency rate trends, identify underlying drivers, and assess the potential impact on various stakeholders.
- Global Economic Perspective: Gain a broader understanding of the interconnectedness of global economies and the role of currency exchange rates in international trade and finance.
- Decision-Making Skills: Learn to make informed decisions based on currency rate analysis, considering economic fundamentals, geopolitical risks, and market dynamics.
- Communication Skills: Improve the ability to communicate complex economic concepts, data analysis results, and policy recommendations effectively to diverse audiences.
Bibliography (References):
