All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nations economy. Like as destabilization of coalition governments in IndiaPakistan and Thailand can negatively affect the value of their currencies. Similarly in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also events in one country in a region may spur positive or negative interest in a neighboring country and in the process affect its currency.
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