Currency Exchange

The foreign exchange (Forex) system gives each active country its own floating currency. Players can trade currencies for profit, and cross-country investments settle in the currency of the asset's country.

Planned economies work differently: a fully command country's official rate is fixed and does not float with macro or player volume. See Planned / Command Economies.

Active currencies#

Around 18 currencies are active in forex trading. The table above shows modern defaults; historical presets use era-specific rates. For example, a 1953 world starts GBP at 0.357, JPY at 360, and NGN at 0.357 per anchor unit. Intermediate start years interpolate geometrically between authored anchors.

Rates are measured against an internal "anchor" unit, not directly against each other. Cross-rates are derived: USD/JPY = jpyRate / usdRate.

How exchange rates move#

Each turn, floating rates update through four components:

1. Macro fundamental drift#

Each country's rate drifts toward a target based on its economic conditions:

macroTarget = baseRate × max(0.01, 1
  − (primeRate − baselinePrime) × 0.02         // higher rates → stronger currency
  + (inflationRate − baselineInflation) × 0.015 // higher inflation → weaker currency
  − (gdpGrowth − baselineGDP) × 0.01           // higher growth → stronger currency
  − (tradeGrowth − baselineTrade) × 0.005       // trade surplus → stronger currency
)

The rate drifts toward the target at 5% per turn. A significant rate shock takes roughly a full game year (~48 turns) to converge 90% of the way. This creates multi-month currency trends: time to spot, build positions, and exit.

A country running well above its target inflation also takes a direct hit on top of the drift: an absolute inflation penalty weakens the currency in proportion to how far inflation exceeds the baseline, independent of the macro-target math above.

Baseline economic values (neutral state):

If the US central bank raises its prime rate from 3.0% to 5%, the USD macro target strengthens by 0.04 (2.0% excess × 0.02 sensitivity). The USD rate then drifts toward that stronger target over many turns.

2. Player volume pressure#

Net buy/sell volume from the past 24 turns creates a short-term rate offset:

volumePressure = clamp(netVolume × sensitivity, −5%, +5%)
finalRate = macroRate × (1 − volumePressure × 0.2)

Volume pressure accounts for 20% of rate direction; macro fundamentals drive the other 80%. The ±5% cap prevents whale trades from causing extreme swings.

3. Random noise#

Per-turn jitter of ±0.4% prevents perfectly predictable movements.

4. Directional regime pressure#

A 12-turn directional regime applies independently of macro fundamentals, trading volume, and noise. The direction and strength come from CYCLE_PRESSURE_BY_REGIME.

Guardrails#

Rates are capped at ±50% from their base rate. A currency cannot hyperinflate or collapse beyond that floor/ceiling.

Trading currencies: three tiers#

Tier 1 (Market Maker): Instant fill at the current rate ± 1% spread. Used automatically for auto-convert purchases. Volume pressure still applies.

Tier 2 (Limit Orders): Post a public order at a target rate. The order auto-fills when the market price crosses your limit (0.64% spread). Other players can manually fill it early for a direct player trade fee instead. Set an optional expiry in turns.

Tier 3 (Direct Trades): Send a specific currency offer to a named character. They can accept or decline, no counter-offers. Expires after 24 turns by default.

Spread fees are split three ways: 25% destroyed (deflationary sink), 25% booked as the currency's central-bank forex revenue, and 50% credited to spreadFeeReserveBalances.<currency>. That currency-specific pool is not the general reserveBalance.

Multi-currency wallet#

Your character has two money pools:

• Campaign funds: Always in your home currency. Used for campaign spending, ads, and party actions. Never converted or held in foreign currency.
• Personal wealth: Multi-currency. Each currency is a separate balance. Foreign income deposits directly into the relevant currency slot.

When making personal purchases in a foreign currency:

1. Spend from your existing balance in that currency (free, no spread)
2. If you lack enough, auto-convert the shortfall from your home currency (1% spread)
3. If both are insufficient, the transaction is rejected

Foreign income#

Income from foreign corporations is handled differently by type:

• Dividends: Automatically converted to your home currency at the market-maker rate (1% spread) when forex is enabled. There is no per-holding preference: this conversion is automatic.
• Bond coupons: Character coupons auto-convert to the holder's home currency at the market-maker spread.
• CEO salary: Paid in the corporation's home currency and deposited directly into your personal balance in that currency. No auto-conversion.

How forex affects the game#

Cross-country investments: If you buy JP stock at ¥26,900 per share and the yen strengthens against your home currency, your holding is worth more in home-currency terms even if the share price didn't move.

Corporate economics: Corporation revenues and costs are denominated in the corporation's home currency. When a US corporation's sector operates in Japan, the revenue is earned in USD (the corp's currency) but taxed at Japanese rates against a JPY-denominated tax base. Cross-country HQ relocations trigger a full treasury conversion at the spot rate.

Central bank policy: The Central Bank Chair sets the prime rate, which feeds directly into the macro target formula. A rate hike makes the currency stronger over the following game months.

Bond prices: Sovereign bonds are priced using the current prime rate. When a central bank changes rates, existing bond prices move, and so does the exchange rate. Both effects compound for cross-country bond holders.

Speculation strategy#

The standard forex speculation flow:

1. Identify a country with weakening fundamentals (high inflation, slow growth, low rates)
2. Wait for the currency to reach a cycle low
3. Buy a meaningful position (limit orders save on spread)
4. Invest in that country's assets while holding the cheap currency
5. Sell when the currency recovers or fundamentals improve

The 24-turn volume lookback means heavy buying gradually pushes the rate down (strengthening the currency further), accelerating your returns, but also attracting other speculators who may exit before you.

See also: Central Banks, Stock Market, Sovereign Bonds, Planned / Command Economies