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Questions and Answers
What impact do inflows of currency through portfolio investments have on the value of the domestic currency?
Appreciation
How does the value of the foreign currency change when there are outflows of forex due to FPI transactions?
Appreciation
What happens to the value of the domestic currency when foreign portfolio investors decide to repatriate their returns to their home country?
Weakening
Why do FPI transactions have a tendency to cause volatility and instability in exchange rates?
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Describe the impact of inflows of forex due to ECCBs on the value of the domestic currency.
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What is the result of foreign portfolio investors disinvesting and repatriating their profits to their home country?
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Explain the relationship between inflows of currency through portfolio investments and the value of the foreign currency.
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How do outflows of forex on account of FPI transactions affect the value of the domestic currency?
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What impact do inflows of forex through portfolio investments have on the value of the dollar?
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When there are outflows of forex due to FPI transactions, what happens to the value of the foreign currency?
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