what is nominal exchange rate?

[dimpy.handa]

nominal exchange rate is the price of foreign currency in terms of domestic currency. when cost of purchasing one foreign currency is quoted in terms of domestic currency it is called nominal exchange rate because exchange rate is quoted in money terms i.e. so many rupees per doller. for instance if 1american dollar can be obtained for 50 indian ropees i.e. if it costs rupees 50 to buy 1 dollar , it will be called nominal exchange rate .

 

[swatiraohnlu]

It is customary to distinguish nominal exchange rates from real exchange rates. Nominal exchange rates are established on currency financial markets called "forex markets", which are similar to stock exchange markets. Rates are usually established in continuous quotation, with newspaper reporting daily quotation (as average or finishing quotation in the trade day on a specific market). Central bank may also fix the nominal exchange rate.