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Net capital flows and real exchange rate depreciation effects on the business cycle in emerging market:
Net capital flows and real exchange rate depreciation effects on the business cycle in emerging market:

... measure the rate between the domestic currency and the foreign currencies in which EMs tend to have denominated their foreign liabilities. Thus, an advantage of using this index is precisely its focus on the real exchange rate between borrowers and lenders, which has been the centre of discussion in ...
The De Facto Exchange Rate Regimes in East Asia over 2003
The De Facto Exchange Rate Regimes in East Asia over 2003

... and smoothing the real economy in the short run in the developing countries in the post-Bretton Woods period based on a sample of 74 countries. Subsequent research attempted to extend to a wide coverage of countries. Levy-Yeyatiand and Sturzenegger (2003) investigated the association between exchang ...
Will the Renminbi replace the US Dollar as the world currency?
Will the Renminbi replace the US Dollar as the world currency?

... Besides comparing the Chinese Renminbi with the transition of Sterling to Dollar, another inclination towards Renminbi as a reserve currency is the Chinese internationalization policies. This will further help the Renminbi to become the trade & settlement currency, a financial transaction currency ...
The move to inflation targeting
The move to inflation targeting

PDF Download
PDF Download

... 13th century with the advent of fishing on a larger scale. During the 12th century the price of fish in Europe had started to increase and fishing became a major occupation on the island after 1400, although it was not the sole occupation of anyone.10 The take-off of the Icelandic economy can also b ...
Statutory Issue Paper No. 81 Foreign Currency Transactions and
Statutory Issue Paper No. 81 Foreign Currency Transactions and

... translation at the exchange rates at the dates the numerous revenues, expenses, gains, losses and surplus adjustments are recognized is generally impractical, an appropriately weighted average exchange rate for the period may be used to translate those elements. Gains or losses due to translating fo ...
CURRENCY COMPETITION BETWEEN EURO AND US DOLLAR Li
CURRENCY COMPETITION BETWEEN EURO AND US DOLLAR Li

... determinants of the real euro-dollar exchange rate: the international real interest differentials, relative prices in the traded and non-traded goods sectors, the real oil price and the relative fiscal position. From 2001 on, many economists designed various kinds of models to analyse the determinan ...
View/Open
View/Open

... Currency exchange rates can play an important role in agricultural markets. In the United States, the relative strength of the U.S. dollar against currencies of other countries can have important impacts on prices for U.S. agricultural commodities. For example, when the U.S. dollar appreciates (that ...
NBER WORKING PAPER SERIES EXTERNAL CONSTRAINTS ON MONETARY POLICY Mark Gertler
NBER WORKING PAPER SERIES EXTERNAL CONSTRAINTS ON MONETARY POLICY Mark Gertler

... sharp contraction in inflation however. By the first quarter of 1999, inflation had fallen to half percent, well below its pre-crisis level. Figure 3 plots the foreign sector of the Korean economy. The forty percent decline in the real exchange rate led to a fifteen percent increase in the ratio of ...
Monetary Policy in the Post-Crisis Period A. Hakan Kara
Monetary Policy in the Post-Crisis Period A. Hakan Kara

... • Changes in the auction methods according to liquidity conditions ƒ Adjustments in the FX liquidity provision facilities ƒ Changes in the export rediscount credit facilities ...
The Swiss Experiment: From the Lower Bound to Flexible Exchange Rates
The Swiss Experiment: From the Lower Bound to Flexible Exchange Rates

... turnover and profits. To understand the importance of such measures, one has to realize that the greatest part of Swiss exports is going to countries in the eurozone. At the moment it is very difficult to estimate the damage to be expected for the real Swiss economy and unemployment. Recently the In ...
Download attachment
Download attachment

... when in excess of specified threshold amounts in Fiji dollars. But, most of the transaction limits were rarely reached; and virtually all transactions were approved and processed within three days. As IMF (2004) noted in their more recent consultations with RBF under Article IV of the IMF Charter, m ...
Currency Manipulation, the US Economy
Currency Manipulation, the US Economy

... sionary potential. Hence the United States must eliminate or at least sharply reduce its large trade deficit to accelerate growth and restore full employment. The way to do so, at no cost to the US budget, is to insist that other countries stop manipulating their currencies and permit the dollar to ...
Introductory Remarks Lamberto Dini*
Introductory Remarks Lamberto Dini*

... resulting from the movements of interest rates and their effects on demand and supply conditions in the goods and labor markets. Moreover, monetary restraint pursued hand-in-hand with expansionary fiscal policies for long periods has clearly revealed the interdependence between these two instruments ...
Currency Substitution, Unofficial Dollarization and Estimates of
Currency Substitution, Unofficial Dollarization and Estimates of

... currency confiscations. When de facto dollarization or euroization is widespread, the effective money supply is much larger than the domestic money supply and is, moreover, less easily controlled by the monetary authority because of the public’s propensity to substitute foreign for domestic currency ...
How does the Exchange Rate React to a Cost-Push
How does the Exchange Rate React to a Cost-Push

... Equation (2) is an IS relationship for a small open economy and describes aggregate demand as a function of the real interest rate, the real exchange rate and of demand in the previous period. In addition, ε is a demand shock - that is a shock in demand in excess of that which is ascribable to the r ...
A Macroeconomic Theory of the Open Economy
A Macroeconomic Theory of the Open Economy

... Capital Flight from Mexico The increase in NCO causes an increase in the supply of pesos in the foreign exchange ...
Trade Base Currency
Trade Base Currency

Origins and Evolution of the European Financial Crisis
Origins and Evolution of the European Financial Crisis

Market Update - Lazard Asset Management
Market Update - Lazard Asset Management

... much of the rest of the world; exacerbating weakness in commodities, tightening liquidity in many emerging markets, and amplifying the strains on China’s de facto US dollar peg. In our view, the change in the US dollar trajectory has been driven by three factors. First, the Fed has become more sensi ...
IOSR Journal of Economics and Finance (IOSR-JEF)
IOSR Journal of Economics and Finance (IOSR-JEF)

... The Monetary Theory The monetary theory of exchange rate determination is one of the most recent. It is indeed a very popular model that has generated a lively debate in International Economics and Finance. The theory is last in the well-known tradition of the monetarists or the monetarist school, w ...
THE RELATIONSHIP BETWEEN INFLATION, EXCHANGE RATE
THE RELATIONSHIP BETWEEN INFLATION, EXCHANGE RATE

... In Malaysia, the economic conditions were influenced by the Global Financial Crisis in 2008. The instability of international financial markets had overflow inside the domestic financial markets. After amendment in stock market and currency, the decrement of export and domestic demand had turned Mal ...
Outlook for China`s Onshore Market
Outlook for China`s Onshore Market

... ¾ In the middle of December, ECB Governor Mario Draghi made an unexpectedly dovish remark after the ECB Committee meeting. As a result, the euro/U.S. dollar exchange rate fell even further. The Chinese yuan then depreciated against the U.S. dollar as well to 6.96 level. Thereafter, the number of mar ...
12EPP Chapter 14
12EPP Chapter 14

... privately owned, publicly controlled central bank of the United States ...
Working Paper 12-15: Choice and Coercion in East Asian Exchange
Working Paper 12-15: Choice and Coercion in East Asian Exchange

... The exchange rate policies of East Asian states have far-reaching ramifications for international relations within the region, for their relations outside the region, and for the structure of the world economy. Many Asian states have somewhat famously kept their currencies competitively valued throu ...
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Fixed exchange-rate system

A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime where a currency's value is fixed against either the value of another single currency, to a basket of other currencies, or to another measure of value, such as gold. There are benefits and risks to using a fixed exchange rate. A fixed exchange rate is usually used in order to stabilize the value of a currency by directly fixing its value in a predetermined ratio to a different, more stable or more internationally prevalent currency (or currencies), to which the value is pegged. In doing so, the exchange rate between the currency and its peg does not change based on market conditions, the way floating currencies will do. This makes trade and investments between the two currency areas easier and more predictable, and is especially useful for small economies in which external trade forms a large part of their GDP.A fixed exchange-rate system can also be used as a means to control the behavior of a currency, such as by limiting rates of inflation. However, in doing so, the pegged currency is then controlled by its reference value. As such, when the reference value rises or falls, it then follows that the value(s) of any currencies pegged to it will also rise and fall in relation to other currencies and commodities with which the pegged currency can be traded. In other words, a pegged currency is dependent on its reference value to dictate how its current worth is defined at any given time. In addition, according to the Mundell–Fleming model, with perfect capital mobility, a fixed exchange rate prevents a government from using domestic monetary policy in order to achieve macroeconomic stability.In a fixed exchange-rate system, a country’s central bank typically uses an open market mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order to maintain its pegged ratio and, hence, the stable value of its currency in relation to the reference to which it is pegged. The central bank provides the assets and/or the foreign currency or currencies which are needed in order to finance any payments imbalances.In the 21st century, the currencies associated with large economies typically do not fix or peg exchange rates to other currencies. The last large economy to use a fixed exchange rate system was the People's Republic of China which, in July 2005, adopted a slightly more flexible exchange rate system called a managed exchange rate. The European Exchange Rate Mechanism is also used on a temporary basis to establish a final conversion rate against the Euro (€) from the local currencies of countries joining the Eurozone.
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