Diplomacy & Politics Glossary

An agreement between two parties to exchange principal and interest payments in different currencies over a set period.

A weighted average exchange rate of a country's currency against a basket of other currencies, reflecting trade importance.

The weighted average exchange rate of a country's currency against a basket of other currencies, reflecting trade patterns and currency values.

A weighted average of several currencies used by a country to stabilize its own currency's value.

The extent to which changes in exchange rates affect domestic prices of imported and exported goods.

A fixed exchange rate system where a country’s currency value is tied to another currency or basket of currencies.

The system a country uses to manage its currency in relation to other currencies, such as fixed, floating, or pegged.

The degree of fluctuation in a currency's value against others over time.

Central bank actions to offset the impact of foreign exchange interventions on the domestic money supply.

Central bank actions to offset foreign exchange interventions to maintain monetary policy targets.

A group of countries that adopt a single currency and coordinate monetary policy.

An index measuring a currency’s value relative to a weighted average of several foreign currencies without adjusting for price differences.