CONCEPTUAL APPROACHES TO THE FORMATION AND FUNCTIONING OF THE FOREIGN CURRENCY MARKET AND EXCHANGE RATE

The article examines the evolution of theories explaining the mechanisms of exchange rate formation and regulation of currency markets. Starting from classical concepts of the gold standard (XIX - early XX centuries), the author analyses the transition from self-regulating systems, where exchange rates were determined by the gold content and monetary parity, to more complex models that take into account the role of the state and market factors. Special attention is paid to neoclassical ideas of purchasing power parity, G.F. Knapp's nominalist theory (exchange rate as a product of government policy), and Keynesian approaches that emphasize the need to regulate exchange rates to achieve macroeconomic stability. The key theories of the 20th century are considered: the concept of key currencies (dollar and pound), the theory of floating exchange rates (M. Friedman), Marshall-Lerner conditions for the balance of trade, the income-absorption model of S. Herbert and the theory of optimal currency areas (R. Mandell, P. Kenen). The paper emphasizes that the evolution of the theories reflects the search for a balance between market self-regulation and government intervention. The conclusions of the paper emphasize the need to synthesize historical experience and modern models for effective management of foreign exchange markets in the context of global economic instability.