Formation of The Exchange Rate Based on Market Mechanisms Is Important for The Economy

The formation of the exchange rate based on market mechanisms plays a crucial role in ensuring economic stability and efficiency. This study examines the key factors influencing exchange rate determination in a market-driven environment, highlighting the impact of supply and demand dynamics, monetary policy, and external economic conditions. The findings emphasize that a well-functioning market-based exchange rate system enhances trade competitiveness, attracts foreign investment, and contributes to overall macroeconomic stability. The research provides insights into optimizing exchange rate policies to support sustainable economic growth.