Foreign Exchange

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Introduction

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Good day to you, I welcome you to my page.

Here I'm going to be discussing about the topic Foreign Exchange.

I talk about my country and how it makes foreign currency through its boisterous sector.

As you go through the write-up, I hope it will be worth your while.

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Name 3 major ways your country earns foreign exchange. Briefly explain how each method works.

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My country earns foreign exchange through the oil industry, entertainment, and sales of food stock.

In the oil and gas industry, we produce oil which we export to foreign countries for refining.

Some of these foreign countries already have their companies in our country where they produce the oil.

So once oil is produced, these foreign companies pay us in dollars to get the produced oil.

These dollars paid to our country then enters the country's account for sustenance of the country.

In the entertainment industry, our main source of foreign currency is through music.

Our music is on of the most popular in the world after that of America.

We have a lot of collaborations with our foreign counterparts and every record sales made is brought in by the record owners.

Finally, we sell foodstock in bulk to foreigners and those that needs them and earn in foreign currencies.

There are a lot of foodstock that are present in our country and has high health benefits.

Some are even needed by big pharmaceutical companies abroad.

So we package the foodstock, locate the willing buyers, sell to them and earn in foreign currency.

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Which sector contributes the most to your country's foreign exchange earnings? Why?

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It is obvious that the oil sector contributes the most to my foreign exchange earnings.

And that's because it is backed by the Federal Government of our country.

The oil industry is the largest industry in our country and the most lucrative industry.

More attention is given to the oil industry than even agriculture where food is produced.

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Does your country's foreign reserves depend on this particular sector or are there many other sectors as alternatives?

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I can confidently say yes our country's foreign reserves depends on our oil and gas industry.

Like I said previously, most of our dollars comes from the oil industry. It so much that our economy is usually said to be oil depended.

So our reserves has oil dollars in it.

Even if there are other alternatives which I'm not aware of at this time, the amount it produces is tiny, or if there are more than one alternatives, the combined amount is less compared with that of oil being produced.

Our music industry dollars rarely has it's way to our foreign reserves.

Likewise money made from foodstock. That's because the federal government doesn't have attachments to them.

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What kind of problems do you think your country will face If this sector somehow collapses?

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If the oil and gas sector somehow collapses, it will cause untold hardship in the country.

First and foremost, the foreign currency we are talking about will surely cease from flowing.

This will affect the flow of money in our economy.

Then because it is our oil and gas sector, there will be no oil to fuel our cars and machines to perform duties.

This is another catastrophic situation as everything in the country will come to a halt.

In addition, there will be no light too because it is our gas that's used in producing light.

So even thinking of what will happen if our oil and gas sector collapses is even giving me headache.

It will be a catastrophic and an unpleasant situation.