ABSTRACT
To maintain financial stability and confidence in a country's currency, a government may elect to peg its currency to another major world currency such as the US dollar, euro, or to a basket of currencies. Since marketing managers prefer to receive monetary payment for transactions, currency and financial concerns become an integral part of international marketing. The international marketer may need to convert various amounts of one currency to another currency. Consequently, the international marketer needs to know how to convert one currency to another to understand the potential impact of currency conversions on the firm's financial situation. When exchanges are made from countries where the currency is experiencing price inflation or devaluation, financial losses may result. The international marketer should also be alert for countries in which administered exchange rates are utilized. Administered exchange rates occur when the rates at which currency is bought and sold are artificially set at a rate different from the free market rate.
