LESSON 7: CURRENCY AND EXCHANGE RATES

Currency

Money in the form of paper (banknotes) or coins, issued by a government and accepted at face
value, is known as currency. In bartering, goods and services were exchanged directly for other
goods and services. Currency has replaced bartering as the primary means of exchanging goods
and services in the modern world.

Philippine Currency

Philippine’s official currency is the Philippine Peso (Pesos in plural form) or “Piso” in Filipino. It
is subdivided into Centavo (1 Peso is equal to 100 Centavos) or “Sentimo” in Filipino. Below are
the current money of the Philippines but there are other old designs of banknotes and coins that
are still accepted.

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USA Currency

United States of America’s official currency is the US Dollar (Dollars in plural form). Just like the
Peso, it is subdivided into Cents (1 Dollar is equal to 100 Cents). We have included the study of
the currency of America because it is the most widely used currency in the world.

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 1 Dollar Coin Half Dollar (50 cents)

Quarter (25 cents) Dime (10 cents)

Nickel (5 cents) Penny (1 cent)

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Exchange Rate

Exchange Rate on the other hand is the value of one currency for the purpose of conversion to
another. Exchange rates are impacted by both the domestic currency value and the foreign
currency value. Most exchange rates are defined as floating and will rise or fall based on the
supply and demand in the market. Some exchange rates are pegged or fixed to the value of a
specific country's currency. For example, the Hong Kong dollar is pegged to the US dollar in a
range of 7.75 to 7.85. This means the value of the Hong Kong dollar to the US dollar will remain
within this range.

Exchange rate changes affect businesses by changing the cost of supplies that are purchased
from a different country, and by changing the demand for their products from overseas customers.

The exchange rate between two currencies is commonly determined by the economic activity,
market interest rates, gross domestic product, and unemployment rate in each of the countries.
Commonly called market exchange rates, they are set in the global financial marketplace, where
banks and other financial institutions trade currencies around the clock based on these factors.
Changes in rates can occur hourly or daily with small changes or in large incremental shifts.

An exchange rate is commonly quoted using a code for the national currency it represents. For
example, the code USD represents the US dollar; PHP represents Philippine Pesos; while EUR
represents the euro. To quote the currency pair for the US dollar and the Japanese Yen, it would
be USD/JPY.

Here is an example why we need to learn another currency and exchange rate. “A traveler to
Germany from the US wants 200 USD worth of EUR when arriving in Germany. The sell rate is
the rate at which a traveler sells foreign currency in exchange for local currency. The buy rate is
the rate at which one buys foreign currency back from travelers to exchange it for local currency.”

Formula: Required

Required Currency
Given Currency x ( ) = Required Currency
Given Currency

Given Conversion Factor

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Exchange Rates Table as of February 20, 2024 (Source: x-rates.com)

Conversion
Country Currency Code
Factor to PHP
Australia Australian Dollar AUD 0.0273
Bahrain Bahraini Dinar BHD 0.0067
Canada Canadian Dollar CAD 0.0241
China Chinese Yuan Renminbi CNY 0.1284
UAE UAE Dirham AED 0.066
France Euro EUR 0.0166
India Indian Rupee INR 1.4809
Indonesia Indonesian Rupiah IDR 279.2465
Japan Japanese Yen JPY 2.6818
Malaysia Malaysian Ringgit MYR 0.0854
Mexico Mexican Peso MXN 0.3043
Philippines Philippine Peso PHP 1
Qatar Qatari Riyal QAR 0.0649
Russia Russian Ruble RUB 1.63321
Saudi
Saudi Arabian Riyal SAR 0.0669
Arabia
Singapore Singapore Dollar SGD 0.024
South
South Korean Won KRW 23.8655
Korea
Taiwan Taiwan New Dollar TWD 0.5615
Thailand Thai Baht THB 0.645
USA US Dollar USD 0.0178

Examples:
(1) How much is 20 USD converted into PHP (use the table above)?
Given: 20 USD

Required: equivalent value in PHP

Solution:

1 PHP
20 USD x (0.0178 USD) = 1123.60 PHP

or ₱ 1123.60

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(2) How much is 4000 PHP converted into USD (use the table above)?
Given: 4000 PHP

Required: equivalent value in USD

Solution:

0.0178 USD
4000 PHP x ( 1 PHP
) = 71.20 USD

or $ 71.20

(3) How much is 5600 AED converted into CAD (use the table above)?
Given: 5600 AED

Required: equivalent value in CAD

Solution:

0.0241 CAD
5600 AED x ( 0.066 AED ) = 2044.85 CAD

(4) Which is greater, 19 CAD or 19 AUD (use the table above)?

Required: which is greater

Solution:

1 PHP 1 PHP
19 CAD x ( 0.0241 CAD) = 788.38 PHP 19 AUD x ( 0.0273 AUD) = 695.97 PHP

Therefore, 19 CAD > 19 AUD

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Let’s still check your understanding.
Exercises 7:

Complete the table below (use the exchange rates table above):

PHP AED USD CAD

2000 (1) (2) (3)

Answers: (1) 132 AED (2) 35.6 USD (3) 48.2 CAD (4) 3030.3 PHP (5) 53.94 USD (6) 73.03 CAD
(7) 1123.6 PHP (8) 74.16 AED (9) 27.08 CAD (10) 82.99 PHP (11) 5.48 AED (12) 1.48 USD

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Instruction: Answer the following. Use the table of exchange rates above. Show your solution
and box or encircle your final answer.

1) Arrange the following amount in descending order (from largest amount to least amount when
converted in a common currency):

13 USD, 13 CAD, 13 TWN, 13 SGD, and 13 AUD

2) When in S. Korea, you saw a chocolate bar worth 2000 Korean Won. You have 85 PHP in your
wallet and that is the only money you have. If converted to Won, will you be able buy the
chocolate?

3) How much is 23 Ruble in Baht?

4) A plane ticket worth 45 Singapore Dollars. Can you afford the ticket if your money is 50
Australian Dollars?

Name: _________________________________ Grade & Section: ___________________

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