Lesson Plan

• Describe how monetary‑policy tools (interest rates, OMO, reserve requirements, direct intervention) influence the foreign‑exchange rate.
• Explain the economic effects of currency appreciation and depreciation on exports, imports, inflation and GDP.
• Analyse how different exchange‑rate regimes (floating, fixed, managed float) affect a central bank’s policy autonomy.
• Apply a checklist to evaluate a monetary‑policy decision and predict its macro‑economic outcomes.

• Projector and screen
• PowerPoint slides with diagrams
• Printed worksheets containing FX‑rate scenarios and checklist
• Calculators
• Whiteboard and markers
• Exit‑ticket slips

Begin with a short video clip showing a sudden shift in a country’s currency value and ask students what they think caused it. Recall the basic functions of monetary policy covered in the previous lesson. State that by the end of class they will be able to predict how specific policy actions move the exchange rate and assess the wider economic impact.

1. Do‑now (5’) – Quick quiz on monetary‑policy tools and their primary purpose.
2. Mini‑lecture (10’) – Explain how interest‑rate changes, open‑market operations, reserve‑requirement adjustments, and direct FX intervention affect the currency, using the suggested supply‑demand diagram.
3. Guided practice (12’) – Pairs complete a worksheet calculating export revenue after a depreciation and fill out the checklist for a given policy action.
4. Group discussion (8’) – Share worksheet results; discuss how appreciation vs. depreciation influence exports, imports, inflation and GDP.
5. Regime analysis activity (10’) – Students match each policy tool to floating, fixed, or managed‑float regimes and justify any constraints.
6. Exit ticket (5’) – Write one sentence: “If the central bank raises interest rates, the domestic currency will … because …”.

Summarise the key link between monetary‑policy decisions and exchange‑rate movements, highlighting the trade‑offs with inflation and growth. Collect exit tickets to gauge understanding, and assign homework: students must research a recent real‑world example of a central bank’s FX intervention and write a brief analysis using the checklist.