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INFORMATION AND COMMUNICATION UNIVERSITY School of humanities and social sciences NAME: Isabel KapembwaChilambwe SIN: 1301230527 COURSE: Money ,Banking and Financial Markets PROGRAMME: Bachelor of Arts Business Administration SEMESTER: 7 ASSIGNMENT: 1 Introduction This paper contains all the answers to the assignment questions. It has been answered in a way that the lecturer instructed .I hope the answers given will meet the expectation of the lecturer. Question 1 INTERNAL REPORT TO: Governor FROM: Isabel Chilambwe-Chairperson DATE: 20THJuly 2016 SUBJECT: MEASURES AND POLICIES TO MANAGE EXCHANGE RATES IN ZAMBIA Introduction Foreign exchange market and management of exchange rate of a country’s currency are two key areas that influence the economic well-being of the general public. The exchange rate of a country’s currency is the value of its money for international trade in goods, services and finance and, therefore, it is part and parcel of the monetary condition of a country. In macroeconomic perspective, foreign exchange policies are instrumental in mobilization of foreign savings and capital to fill the domestic resource gap and expand investments. Various public views are often expressed as to how the central banks should decide exchange rate policies and what factors should be taken into consideration. Looking at the Zambian economy, we need to put certain measures into consideration before the economy elapses. The following discussed in the passage will be able to maintain or boost the Zambian economy. WAYS OF INTERVENING WITH THE ZAMBIAN CURRENT EXCHANGE RATE Basically, all the methods adopted to implement exchange rate control can be classified under two groups namely; a. Direct and indirect methods If the exchange control strategy affects the conversion rate straight away then it is called as the direct method. If the tactic affects some other sector but finally influences a change in the exchange rate then it is called as the indirect method. b. Unilateral, bilateral and multilateral methods Unilateral methods are strategies implemented by the central bank of a country without taking into consideration the opinion of other countries. Bilateral and multilateral methods are those exchange rate control mechanisms applied with mutual consent of two or more countries. Unilateral methods Exchange intervention or pegging It is a soft form of intervention in the market. As per this strategy, the central bank of a country will intervene in the market to bring the exchange rate to a desired level, if there is a concern about speculators driving the price too high or low. If the central bank buys the currency with an intention to increase the exchange rate then the currency is said to be pegged up. Similarly, the currency is stated to be pegged down when the central bank intervenes in the market to decrease the exchange rate. It should be noted that the intervention will not cause permanent trend change. Foreign currency exchange control and restrictions Foreign exchange control refers to the process of restricting transactions involving foreign exchange either by a government or the central bank. When foreign exchange control is in force the market forces will not be able to operate freely because of the restrictions imposed. Thus, the rate of exchange would differ from the one that will exist in the free market scenario. It is done with an intention to achieve economic stability. In fact, the International Monetary Fund has a specially laid out provision named article 14, which strictly allows only transitional economies to implement foreign exchange controls. Notwithstanding the provision, in the modern era, to shield the economy from unexpected currency exchange rate volatility, almost all countries employ foreign exchange controls in some form or the other. By controlling the demand and supply of currency, the central bank of a country can influence the exchange rate. The following are the widely adopted measures to keep the exchange rate under check: i. Blocked account The bank accounts of foreigners are blocked under this system. If there is a dire necessity the central bank will even transfer funds from all the blocked accounts into one single account. However, it will create bad impression about the country thereby leading to lasting negative effects on the economy as a whole. ii. Multiple exchange rates Under this system, a central bank will have total control over the foreign currency and offer different rates for purchase and sale by the importers and exporters respectively. This is done to control the capital outflow from the country. It can be construed as rationing of foreign currency by price instead of volume. The system is complex and only creates additional headaches to the central bank. iii. Rationing of foreign exchange In this method, the control over foreign exchange will solely lie in the hands of the central bank, which will decide the quantum of foreign exchange to be distributed for every incoming request. No individual or corporate can hold foreign currency. Only urgent needs would be considered. iv. Exchange Equalization Account (EEA) To control short-term volatility in the exchange rate, the central bank of UK, following the exit from the Gold Standard, created a fund named Exchange Equalization Account in 1932 to prevent unwanted volatility in the exchange rate of Pound Sterling. The strategy was later adopted by USA (Exchange Stabilization Fund) and other European countries including Switzerland and France. Bilateral and multilateral methods a. Payment agreements Under this system, the debtor and creditor country enters into a payment agreement to overcome the delay in the settlement of international transactions. The agreement will stipulate the methods to be followed for controlling the exchange rate volatility. Usually, the method includes but not limited to the controlled distribution and rationing of the foreign exchange. b. Clearing agreements This exchange rate control strategy is implemented through an agreement between two or more countries. Based on the agreement, the exporters and importers respectively will receive proceeds and make payments in their domestic currency. For this purpose a clearing account with the central bank is used. Thus, the need for foreign exchange is avoided, which in turn reduces the exchange rate volatility. The system was used by Germany and Switzerland during great depression in 1930. Standstill agreements Under this system, through a moratorium, a central bank converts short term debt into longterm debt. Such a process offers adequate time for repayment. This removes the downward pressure on the exchange rate. The system was implemented by Germany in 1931. d. Compensation agreement The process involves a barter agreement between two countries. One country will be a net exporter and other one will be a net importer. The value of exports and imports will be equal. Thus, the need for a foreign currency is avoided and the exchange rate remains stable. Transfer moratoria Under this system, the central bank bans all kind of payments to creditors abroad. The debtors should make domestic currency payment to the central bank, which will disburse funds when there is overall improvement in foreign exchange reserves. Indirect methods Regulation of bank interest rates When bank interest rate is increased, capital inflow (through foreign investors) will go up. This will increase the demand for domestic currency thereby making the exchange rate stronger. The opposite scenario happens when the interest rate is lowered. Thus, whenever it is necessary, the central bank indirectly controls the exchange rate by altering the bank interest rates. International trade regulations When the balance of trade becomes unfavorable, a government can impose import restrictions through a series of measures (tough clauses, changes in policy, quota system and additional tariffs). Simultaneously, exports can be promoted (international business exhibitions, subsidies etc.). This will ultimately make imports unattractive and boost exports. The net gain in the foreign exchange reserves will obviously strengthen the exchange rate. c. Gold import policy Barring few countries in Africa, almost all others are net importers of gold. By restricting (increasing import duties) the import of gold, the exchange rate can be altered. This tactics is often used by India, which imports about 700tons of gold every year. When import decreases, foreign exchange reserves increases thereby resulting in a better exchange rate. Currency intervention, also known as foreign exchange market intervention or currency manipulation is a monetary tool applied by central banks. It occurs when a government buys or sells foreign currency, to push the exchange rate of its own currency away from equilibrium value or to prevent the exchange rate from moving toward its equilibrium value. Indirect intervention Indirect currency intervention is a policy that influences the exchange rate indirectly. Some examples are capital controls(taxes or restrictions on international transactions in assets), and exchange controls (the restriction of trade in currencies).Those policies may lead to inefficiencies or reduce market confidence, but can be used as an emergency damage control. Non-sterilization intervention In general, there is a consensus in the profession that non-sterilized intervention is effective. Similarly to the monetary policy, non- sterilized intervention influences the exchange rate by inducing changes in the stock of the monetary base, which, in turn, induces changes in broader monetary aggregates, interest rates, market expectations and ultimately the exchange rate. As we have shown in the previous example, the purchase of foreign-currency bonds leads to the increase of home-currency money supply and thus a decrease of the exchange rate. Conclusion In conclusion, central banks intervene in foreign exchange markets to achieve a variety of overall economic objectives: controlling inflation, maintaining competitiveness, or maintaining financial stability. The precise objectives of policy and how they are reflected in currency manipulation depend on a number of factors, including the stage of a country's development, the degree of financial market development and integration, and the country's overall vulnerability to shock. Theoretically there is no limit for the rise or fall of a paper currency. Thus, adverse changes in the exchange rates will create unmanageable economic instability. When the currency of a country strengthens (rise in the exchange rate) there will be positive effects (rising productivity, lower unemployment, high economic growth, incentives to cut cots etc.,) overall. However, if a currency becomes stronger because of speculative activities then it would lead to a recession. Swiss Franc is a classic example for a speculation driven currency. Problems in the USA and the Euro zone naturally lure investors to Switzerland, which is considered as a safe haven for investments. Thus, Swiss Franc often sees fundamental overvaluation and the central bank should intervene to prevent the country from falling into recession. Results in exchange rate stability. Enables correcting adverse balance of payment scenario. Prevents depletion of gold reserves and foreign exchange reserves. Preserves capital flight. Fuels economic growth and stability. Disadvantages of foreign exchange control Indirectly increases the level of administrative corruption. A large number of competent officials are required to manage the smooth functioning of the economy. Creates misunderstanding with major economic powers. Multinational companies are discouraged from making large commitments. By and large, fundamental disequilibrium is created. Volume of international trade declines as a whole. Exchange control measures can be considered as a double-edged sword. There may be situations where exchange control measures would be temporarily necessary. However, stringent and hasty decisions can put a country’s economy into an unrecoverable financial chaos. Question Two a) Financial Institutions or Financial intermediaries serve a very pivotal role in any country economic system .A financial institution is an institution that provides financial services for its clients or members. These are institutionswhich connect the savers tothe borrowers through financial intermediation. At the heart of every financial system lies acentral bank. It controls a nation’s money, and the money supply is a vital component of the economy. Thus, central banks use several definitions tomeasure the money supply. One of the most important financial services provided by financial institutions is acting as financial intermediary. Most financial institutions are regulated by government. The four broad categories of financial institutions that exist today are: Securities Market Institutions Securities market institutions are the investment bankers, brokers, dealers, and organizedexchanges. These institutions enhance the liquidity of the secondary markets. However, these institutions are not financial intermediaries, and they do not link the savers to the borrowers. Instead, the securities market institutions help the savers locate the borrowers. Prominent securities market institution is the investment bank. An investment bank helps corporations issue new stock and bonds, or it helps a local or state government issues newbonds. Furthermore, an investment bank could help a corporation take over another. Consequently, the investment bank is an influential player in the primary market. Forexample, Ford wants to build a new factory and decides to issue new stock. New stock willprovide funds that Ford can use to build the factory. Ford will go to an investment bank, and theinvestment bank will assist Ford in creating the new securities. Then the investment bank sellsthese new Ford stock to customers. If these customers want to sell their stock, subsequently,they sell them on the secondary markets or organized ex Process of issuing new stock called underwriting. Investment bank guarantees a stock or bond price to the corporation. Then the investment banksells the new stock or bond for a higher price. Greater price is the investment banker’s profit.Furthermore, investment banks may work together, which are called syndicates. One investmentbank acts as the manager and retains part of the profits while other investments banks help to sell the new securities. Investment Institutions Investment institutions are mutual funds and finance companies. A mutual fundmanager groups together funds from many investors and invests the money in a variety of stocks. Consequently, a mutual fund diversifies stocks, and it lowers investors’ risk. For example, youstart your own mutual fund and offer investors a chance to invest in this fund. You take themoney and buy 30 different corporate stocks. The Coca-Cola stock rises one day while the valueof IBM stock falls. Overall, the average of the fund’s 30 stocks should earn a return to your fundand to the investors. If you bought only Kmart corporate stock, you would lose your investmentif this company bankrupts.Mutual fund companies have different strategies and characteristics, and well-knownmutual fund companies are Fidelity, Vanguard, and Dreyfus. Mutual fund companies developstrategies where they only buy stock in certain industries, large companies, or foreigncompany’s stock. Furthermore, the mutual fund company may issue a fixed number of shares toMoney, Banking, and International Finance the fund called closedend mutual funds. Then investors may buy and sell these shares in overthe-counter markets, just like stock. Thus, the mutual fund company does not buy its shares backfor closed-end mutual funds. A mutual fund company may offer another alternative called open ended. Mutual funds: Mutual Fund Company can buy back shares to the fund, and the price of theshares is tied to the value of the stock in the fund. Finally, the mutual fund managers use twomethods to earn profits. First, fund managers charge management fees for no-load funds,usually 0.5% of asset value. Secondly, the fund managers charge a commission for selling orpurchasing of shares for load funds. The load is the commission that lowers the fund’s value. Money-market mutual funds are similar to mutual funds. However, the fund manager buys only money market securities, and the fund excludes corporate stock. Theory behind moneymarketmutual funds is simple. If you have five friends with $2,000 each, and they want to buy aTreasury bill with a minimum face value of $10,000, then your friends can pool their moneytogether and buy one T-bill. Once the T-bill matured, your friends split the interest amongthemselves.Money-market mutual funds are very popular because these funds offer check-writingprivileges, and some investors do not want to tie up their funds for a long time. Moreover, thevalue of the fund does not change much, when interest rates changes because money marketsecurities have maturities less than one year. Commercial banks offer money market deposit accountsthat are similar to the moneymarket mutual fund. The two funds differ because the Federal Deposit Insurance Corporation (FDIC) insures the money market deposit accounts, while it does not insure money-marketmutual funds. If your bank bankrupted and you invested in money market deposit accounts, subsequently, you are guaranteed not to lose your funds up to the maximum insured amount. Finance companiesare another investment institution, and they raise money by sellingstock, bonds, and commercial paper. Commercial paper is a short-term loan with a maximummaturity of 270 days, and a well-known bank or corporation can issue it. Commercial paper is aform of direct finance and has no collateral. Furthermore, finance companies lend to consumersfor furniture, appliances, cars, home-improvement loans, or they lend to small businesses. Somecorporations created their own finance companies to help consumers buy their products. Contractual saving institutions These are insurance companies and pension funds. InsuranceCompaniesprovide protection for people who buy insurance policies. Insurance policy preventsfinancial hardship, such as a medical emergency, car accident, or the death of a family member.Insurance companies are financial intermediaries because they link the funds from thepolicyholders to the financial markets. Policyholders make periodical payments to the insurancecompany called premiums. Insurance company will invest the premiums in the financialmarkets. For the insurance company to earn a profit, the amount of interest earned in thefinancial markets plus the total amount of premiums must exceed the amount paid for claims. Commissions may limit premiums, minimizefraud, and prevent the insurance companies from investing in risky securities. First type of insurance company is a life insurance company. These companies purchase longterm corporate bonds and commercial mortgages because they can predict future payments with high accuracy. Furthermore, the insurance companies are organized in two ways: Mutual company or stock company. Insurance policyholders own a mutual company because the insurance policy functions as corporate stock, while a stock companyis a corporation that issues stock. Thus, the shareholders own the company, while the insurance policyholders do not. Stock company is more common because a stock company has more funding sources. They receive funding by selling stock to shareholders, and receive revenue by selling insurance policies. Most policies issued are called term life policies. Person buying the life insurance must pay the premium for the rest of his life. These policies are popular because the policyholder can borrow against the value of the life insurance policy, when he retires. Borrowing against insurance is an annuity. An annuity ypays a retired person a specific amount of money each year. Second type of insurance company is property and casualty insurance companies. They are organized as either a stock company or mutual company, and they insure against theft, illness, fire, earthquakes, and car accidents. These companies tend to purchase liquid, short-term assetsbecause these companies cannot accurately predict the amount of future claims. Insurancecompanies charge premiums that correspond to the chance of the event occurring. Unfortunately, insurance companies have two problems, whenselling insurance policies: Adverse selection and moral hazard. Adverse selection means aperson who buys insurance has more information than the insurance company. For example, aperson knows he has a heart problem and decides to buy a very large life insurance policy, andhe hides this information. Moral hazard means people buying insurance becomes more carelessthan when they did not buy insurance. For instance, a person buys theft insurance for his home,and this person stops locking his windows and doors when he leaves, increasing the risk aburglar will break into his home. However the Insurance companies have two strategies to combat the problems of moral hazard andadverse selection. First, insurance companies gather information about the policy holders, such as driving records, medical records, and credit histories. Consequently, the insurance companycharges a higher premium to a person who is more likely to file a claim, a risk-based premium. Secondly, insurance companies impose a deductible. When a person makes a claim, the personmust pay the first portion. For example, a person buys health insurance with a $500 deductible.After this person has paid the first $500 to a doctor, then the insurance company pays theremainder of the claim. This passes some of the responsibility to the person holding theinsurance policy. Finally, a person could buy insurance with smaller premiums but with agreater deductible. Pension funds are another contractual savings institution. Many people save money for retirement, and pension funds become a vital form of saving. Some employers sponsor pensionfunds as a job benefit, or people can voluntarily pay into personal retirement accounts. Then thefinancial companies manage the pension funds, and they invest pension funds into the financialmarkets. Pension fund managers can accurately predict when people will retire and usuallyinvest in long-term securities, such as stocks, bonds, and mortgages. A person can only receivebenefits from the pension fund after the person becomes vested. Vested means employees mustwork for their employer for a time period before they can receive the benefits from the pensionplan. Time period varies for the pension funds. For example, some city governments require aperson to be employed by the city for 10 years before this person becomes 100% vested in thecity’s pension plan. Employers have three reasons to offer pension plans to employees. First, the pension fund managers can more efficiently manage the fund, lowering the pension funds’ transaction costs. Second, the pension funds may offer benefits such as life annuities. A life annuity is a worker contributes money into the annuity until he retires. Then the worker receives regular payments every year from the annuity until his death. Life annuities could be expensive if a worker buys them individually. However, a large employer with many employees can request discounts frompension plans. Finally, the government does not tax the pension fund as workers invest funds into it, allowing the fund to grow faster. Nevertheless, government usually imposes taxes on withdrawals from a pension fund. If the employer offered higher wages and no pension plans tothe employees, then the government taxes the greater income, reducing the amount an employeecould invest into a retirement plan. Employers have two choices for the ownership of a pension plan. First, employees own the value of the funds in the pension plan, called a defined contribution plan. If the pension fund Isprofitable, subsequently, the retired employees will receive greater pension income. If the pension fund is not profitable, then the retired employees will receive a low pension income. Companies that have a defined-contribution plan are likely to invest the pension funds into the companies’ own stock. That way, employees have an incentive to be more productive because the value of their pension plan depends on their company’s profitability. However, this pensionfund becomes dangerous if this company bankrupts. Then the employees own worthless stock.One infamous case was the Enron collapse in 2001. Some employees were millionaires untiltheir stock portfolios collapsed in value overnight. Second, the most common type of plan is thedefined-benefit plan. An employer promises a worker a specific amount of benefits that arebased on the employee’s earnings and years of service to the company. If this pension fund isprofitable, the company pays the promised benefits and retains the funds that are not paid to theretired employees. If the pension fund is unprofitable, then the company pays the promisedbenefits out of its own pocket. Unfortunately, a pension fund will bankrupt, when the company where the employees work bankrupts. Consequently, Congress created the Pension Benefit Guaranty Corporation that insures pension fund benefits up to a limit if the company cannot meet its obligations. Some economists believe a pension fund disaster will occur for state and local government retirees Depository Institutions and Savings institutions Depository institutionsaccept deposits and make loans. Thus, they are intermediaries that link the savers to borrowers. Commercial banks are the largest and dominate the depository Institutions. Many borrowers seek bank loans for mortgages, car loans, or credit cards. Savers have three reasons to deposit their savings in a bank than invest directly into the financial markets. First, the bank deposits are liquid. A depositor can quickly exchange his bank depositfor cash. Secondly, the banks gather information about their borrowers, lowering the risk of loandefault. Banks hire financial specialist who monitors investments. On the other hand, an investorwould spend much time and effort to monitor his or her investments in the financial markets. Savings institutions are another depository institution. Originally, these institutions accepted deposits and granted low-cost mortgages for homebuyers Finally, banks reduce the risk by lending to a variety of borrowers. Consequently, commercial banks are important for a community because its role of accepting deposits and granting loans. b) The term structure of interest rates is the relationship between interest rates or bond yields and different terms or maturities. The term structure of interest rates is also known as a yield curve and it plays a central role in an economy. The term structure reflects expectations of market participants about future changes in interest rates and their assessments of money policy conditions. The yield curve is the line that plots the interest rates, at a set point in time, of bolds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, and five-year and 30-year U.S treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or banks lending rates. The curve is also used to predict changes in economic output and growth. The three main theories that try to describe the future yield curve are: Pure expectation theory, Liquidity preference theory and market segmentation theory Pure expectation theory This is the smallest and most direct of the three theories. The theory explains the yield curve in terms of expected short term rates. It is based on the idea that two year yield is equal to a one year bond today plus the expected return on a one year from today. The one weakness of this theory is that it assumes that investors have no preference when it comes to different maturities and the risks associated with them. Liquidity Preference Theory This theory states that investors want to be compensated for interest rates risk that is associated with long term issues. Because of the longer maturity, there is a greater price volatility associated with these securities. The structure is determined by future expectations of the rates and yield premium for interest rate risk. Because interest rate risk increases with maturity, the yield premium will also increase with maturity. Also known as the biased Expectation theory. Market Segmentation Theory This type of theory deals with the supply and demand in a certain maturity sector, which determines the interest rates for that sector. It can be used to explain just about every type of yield curvean investor can come across in the market. An off shoot to this theory is that if an investor wants to go out of his sector, he will want to be compensated for taking on that additional risk. This is known as the preferred habitat theory. c) Default risk is the event in which companies or individuals will be unable to make the required payments on their debt obligations. Lenders and investors are exposed to default risk in virtually all forms of credit extensions. To mitigate the impact of default risk, lenders often charge rates of return that correspond the debtor’s level of default risk. The higher the risk, the higher the required return, and vice versa. The default risk is the risk that a debtor will be unable to pay back its loans. Default risk goes up if a debtor has large number ofliabilities and poorcashflow. Genera lly speaking, companies andpersonswith high default risk stand a greaterchance of a loan bein g denied and pay a higher interest rates on the loans they do receive. Default risk is the possibility a borrower will not repay the principal and/or interest on a loan The default risk is the risk that an insurer of a bond may be unable to make timely principal and interest payments. It is the possibility that a borrower will be unable to meet interest and\or principal repayment obligation on a loan agreement. Default risk has a significant effect on the value of a bond: if a borrower’s ability to repay debt is impaired, default risk is higher and the value of the bond will decline. Default free bonds are theoretical bonds that repay interest and principal with absolute certainty. The rate of return would be the risk free interest rate. Default free bonds are bonds with no default risk.In practice government bonds are treated as risk free bonds, as governments can raise taxes or indeed print money to repay their domestic currency debt. Treasury bills are often considered to be risk free bonds while corporate bonds are debt securities issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases the company physical assets can be used as collateral forbonds. Corporate bonds are considered a higher risk than government bonds. As a result, interest’s rates are almost always higher. Corporate bonds offer a higher yield compared to some other investments but for a price. Most corporate bonds are debentures meaning they are not secured by collateral. Investors of such bonds must assume not only interest rates risks but also credit risk, the chance that the corporateassurer will default on its debt obligations. References Joseph E. Gagnon, “Policy Brief 12-19”, Peterson Institute for International Economic, 2012. Bank for International Settlements, BIS Paper No. 24, Foreign exchange market intervention in emerging markets: motives, techniques and implications, (2005). LucioSarno and Mark P. Taylor, “Official Intervention in the Foreign Exchange Market: Is It Effective and, If So, How Does It Work?,” Journal of Economic Literature 39.3 (2001): 839-68. Obstfeld, Maurice (1996). Foundations of International Finance. Boston: Massachusetts Institute of Technology. pp. 597–599. ISBN 0-262-15047-6. Neely, Christopher (November–December 1999). "An Introduction to Capital Controls". Federal Reserve Bank of St. Louis Review: 13–30. Tyalor, Mark; LucioSarno (September 2001). "Official Intervention in the Foreign Exchange Market: Is It Effective and, If So, How Does It Work?" (PDF). Journal of Economic Literature: 839–868. Mussa, Michael (1981). The Role of Official Intervention. VA: George Mason University Press. Gerlach, Petra; Rober McCauley; Kazuo Ueda (October 2011). "Currency Intervention and the Global Portfolio Balance Effect". Source: Ken Szulczyk. “A Central Bank Intervenes with its Currency Exchange Rate.” Money, Banking, and International Finance. Boundless, 26 May. 2016. Retrieved 30 May. 2016 from https://www.boundless.com/users/233416/textbooks/money-banking-andinternational-finance/the-fed-s-balance-sheet-12/the-fed-s-balance-sheet-33/a-centralbank-intervenes-with-its-currency-exchange-rate-112-15210/ Source: Ken Szulczyk. “A Central Bank Intervenes with its Currency Exchange Rate.” Money, Banking, and International Finance. Boundless, 26 May. 2016. Retrieved 30 May. 2016 from https://www.boundless.com/users/233416/textbooks/money-banking-andinternational-finance/the-fed-s-balance-sheet-12/the-fed-s-balance-sheet-33/a-centralbank-intervenes-with-its-currency-exchange-rate-112-15210/Monetary Measures,Fiscal Measures and other measures