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Tourism Grade 11 Term 2 Week 6 - 2020

Tourism grade 11

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49 views4 pages

Tourism Grade 11 Term 2 Week 6 - 2020

Tourism grade 11

Uploaded by

immaculateyanelisa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Directorate: Curriculum FET

SUBJECT and TOURISM GRADE 11


GRADE
TERM 2 WEEK 6
TOPIC FOREIGN EXCHANGE.
AIM OF LESSON To introduce learners to Foreign Exchange and its value to the South African Economy..
RESOURCES Paper based resources Digital resources
VIA AFRIKA Grade 11 Study guide pages 61- 63. Relevant “You Tube” Videos about Foreign Exchange

FOCUS Tourism Grade 11 pages109 -113. Keyword: Forex


INTRODUCTION In today’s society, most people use money every day, or almost every day, of their lives.
People need money to pay for food, electricity, transport, school fees, clothing etc.
The money is called currency.
According to the CAPS document, learners should be exposed to the following:

• Foreign exchange and its value to the South African Economy:


• Currencies
• Concepts: local currency, foreign currency, foreign exchange, exchange rate, informal fluctuations
• Major currencies of the world, their currency codes and symbols: US dollar, euro, British pound, Japanese
yen, Australian dollar, South African rand
• Facilities where foreign currency can be exchanged, e.g. foreign exchange bureaus, commercial banks,
etc.
• How does money spent by inbound international tourists benefit local people?
Directly and indirectly - the multiplier effect.

CONCEPTS AND LOCAL CURRENCY


SKILLS • The money that people use in a country is known as its local currency.
• South Africa’s currency is the South African Rand.
• Currencies are usually made up of coins and banknotes.
• In South Africa, we have six coins - 10-cent, 20-cent, 50-cent, one-rand, two-rand, five-rand and five
banknotes – 10-rand, 20-rand, 50-rand, 100-rand and 200-rand.
FOREIGN CURRENCY
• When we refer to the currency of another country, we talk about Foreign currency, Foreign Exchange
or Forex for short.

FOREIGN EXCHANGE

When people exchange their money for another currency, we call it foreign exchange, Forex or FX.
For example, a South African tourist travelling to America will need to exchange South African rand to American
dollars.

EXCHANGE RATE

The exchange rate is the price of one currency expressed in units of another currency.
There are two ways to express the exchange rate:
• Local currency per unit of foreign currency:
One US $ 1.00 = R 18.19. Which means that if you buy 1dollar you need to pay R 18.19.
If a South African tourist needs: US $10 000.00 to travel in the USA, he/she will pay 10 000.00 x R18.19 =
R 181 900.00 to get US $ 10 000.00.
• Based on foreign currency per unit of local currency.
• Foreign currency per unit of local currency: R1.00 = Australian $ 0.0887 on 06 April 2020. To buy one rand
you must pay $0.0887 Australian dollars. To find out how much an Australian dollar is worth in rand you
need to divide R1.00 by the number of Australian dollars you will pay for R1.00. So R1.00 ÷ 0.0887 =
R11.27. You always need to round off the amount to two decimal digits.

INFORMAL FLUCTUATIONS

• Informal fluctuations are the changes in value of one currency in relation to another daily, for example,
today US $1.00 might exchange at R18.19, but the next day it might exchange at 17.89.
• When there is a demand for a specific currency the price of the currency will increase. When there is a
decrease in the demand for a specific currency the price of the currency will decrease.
• A strong rand implies that it cost less rand to buy a foreign currency.
A weak rand implies that it cost more rand to buy a foreign currency.
Major currencies of the world.
• The following table show the major currencies of the world.
CURRENCY CODE SIMBOL
British pond or Sterling GBP £
Japanese yen JPY ¥
United States dollar USD $
Australian dollar AUD $
European Union euro EUR €
South African rand ZAR R

Facilities where to exchange Foreign Currencies.

• Foreign Tourists visiting South Africa can exchange their local currencies for rand, tourists from South
Africa visiting other countries can exchange their local currencies for the currencies of their destination
country.
• Facilities where currencies can be exchanged:
o Major commercial Banks
o Bureaux de Change e.g. Rennies Foreign Exchange or American Express.
o Foreign Exchange Bureau
o Travel agencies.
o Major hotels and cruise ships.
• Commercial banks and Foreign Exchange Bureau charge a fee for these transactions.

Currency Rate sheet

“South Africans who are going to travel to another country will go to a bank facility to exchange his/her local
currency for the currency of the country of destination, at BANK SELLING RATE (BSR) - WE SELL.
“A Foreign Tourist travelling to South Africa will go to a bank facility to exchange his/her local currency for the
currency of South Africa, at BANK BUYING RATE (BBR) - WE BUY.

CURRENCIY WE BUY WE SELL


BBR (Value in rand) BSR (Value in rand)
GBP 22.53 22.72
JPY 0.17 0.28
USD 18.19 18.33
AUD 11.27 11.49
EUR 19.75 19.94
Benefits of tourists spending foreign currency.

Money spend by inbound international tourists benefit local people through a


process called the multiplier effect.
This is the process by which the foreign exchange or foreign currency,
brought into the country by foreign tourists, cascades through the economy
from one group of people to another, in the following way:
• Inbound international tourists arrive with foreign currency. They spend
the foreign currency on products and services like transport, local
goods and drink, entertainment and activities.
• The people who supply these goods and services, such as airline
crew, hotel staff, restaurant employees and shop assistants, get paid
salaries or make a profit by providing these goods and services.
These are the people who benefit directly.
• They in turn spend the money on things such as housing, food,
transport, education and clothing. The people who provide these
goods and services also get paid or make a profit. These are the
people who benefit indirectly.
• In this way the money cascades through the economy and everyone
benefits.

ACTIVITIES / Do the following in your workbook.


ASSESSMENT 1. Complete the table below by putting in the correct symbol.

CURRENCY CODE SYMBOL


British pond or sterling GBP
Japanese yen JPY
United States dollar USD
Australian dollar AUD
European Union euro EUR
South African rand ZAR

2. Inbound international tourists come into the country and spend their currency.
Local people benefit.
Describe in your own words what you understand under the term multiplier effect.

VALUES To stimulate learners interest in traveling, and enable them to convert currencies.

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