State four sources of supply of foreign exchange.OR
What are the sources for supply of foreign exchange?
What are the sources for supply of foreign exchange?
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The supply (inflow) of foreign exchange comes from the people who receive it due to the following reasons.
- Exports of goods and services: Supply of foreign exchange comes through exports of goods and services.
- Foreign investment: The amount, which foreigners invest in their home country, increases the supply of foreign exchange.
- Remittances (unilateral transfers) from abroad: Supply of foreign exchange increases in the form of gifts and other remittances from abroad.
- Speculation: Supply of foreign exchange comes from those who want to speculate on the value of foreign exchange.
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