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Fiscal and monetary policies under managed floating exchange rate regimes?
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Gabriel De Kock has written:
'Fiscal policies and the choiceof exchange rate regime' -- subject(s): Mathematical models, Fiscal policy, Foreign exchange
'Endogenous exchange rate regime switches' -- subject(s): Mathematical models, Foreign exchange, Government policy
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I need an answer fast.......... the German system seems to be the peg
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Jo Anna Gray has written:
'The implications of a floating exchange rate regime' -- subject(s): Foreign exchange
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Exchange rates are determined through supply and demand.
An increase in interest rates can appreciate an exchange rate as investors convert their money into that currency to take advantage of a higher return on their money.
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Revaluation is the opposite of devaluation. This occurs when, under a fixed-exchange-rate regime, there is pressure on a country's currency to rise in value in foreign-exchange markets.
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- Automatic adjustment: Flexible exchange rates allow currencies to fluctuate based on market forces, enabling automatic adjustment to changes in supply and demand without the need for government intervention.
- Insulation from external shocks: Countries with flexible exchange rates are better able to insulate themselves from external shocks, such as changes in global economic conditions or commodity prices, as their currency can depreciate or appreciate to rebalance the economy.
- Independent monetary policy: A flexible exchange rate regime gives countries greater freedom in conducting their own monetary policy, as they are not constrained by the need to maintain a fixed exchange rate.
Overall, a flexible exchange rate regime provides countries with the ability to adapt to changing economic conditions, maintain independence in their policy choices, and enhance economic resilience.
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Currency revaluation is the equivalent of currency appreciation, except that it occurs under a fixed exchange rate regime and is mandated by the government.
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A soft peg is a term used for countries with a fixed exchange rate regime. There are soft and hard pegs. Soft pegs generally let their exchange rate fluctuate through a desired bracket. Hard pegs follow the anchor currency more stictly.
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The real effective exchange rate based on real exchange instead of nominal exchange rate in foreign currency exchange.
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The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.
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Debate the relative merits of fixed and floating exchange rate regimes from the perspective of an international business what are the most important criteria in a choice between the systems? Which system is the more desirable for an international business?
The case for fixed exchange rates rests on arguments about monetary discipline, speculation, uncertainty, and the lack of connection between the trade balance and exchange rates. In terms of monetary discipline, the need to maintain fixed exchange rate parity ensures that governments do not expand their money supplies at inflationary rates. In terms of speculation, a fixed exchange rate regime precludes the possibility of speculation. In terms of uncertainty, a fixed rate regime introduces a degree of certainty in the international monetary system by reducing volatility in exchange rates. Finally, in terms of trade balance adjustments, critics question the closeness of the link between the exchange rate and the trade balance. The case for floating exchange rates has two main elements: monetary policy autonomy and automatic trade balance adjustments. In terms of the former, it is argued that a floating exchange rate regime gives countries monetary policy autonomy. Under a fixed rate system, a country's ability to expand or contract its money supply as it sees fit is limited by the need to maintain exchange rate parity. In terms of the later, under the Bretton Woods system, if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy, the IMF would agree to a currency devaluation. Critics of this system argue that the adjustment mechanism works much more smoothly under a floating exchange rate regime. They argue that if a country is running a trade deficit, the imbalance between the supply and demand of that country's currency in the foreign exchange markets will lead to depreciation in its exchange rate. An exchange rate depreciation should correct the trade deficit by making the country's exports cheaper and its imports more expensive. It is a matter of personal opinion in regard to which system is better for an international business. We do know, however, that a fixed exchange rate regime modeled along the lines of the Bretton Woods system will not work. Nevertheless, a different kind of fixed exchange rate system might be more enduring and might foster the kind of stability that would facilitate more rapid growth in international trade and investment. (cbapp.csudh.edu/depts/finance/hmilgrim/Business%20445/Chap010.PPT)
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An exchange rate, which is also called the foreign-foreign exchange rate, is the rate that currency will be exchanged for another currency and may have a forward contract. The spot exchange rate is the current exchange rate today with immediate delivery and it is also called benchmark rates and outright rates.
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A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate.
Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep interest rates down and stimulate increased trade and investment. however I'm not sure what a currency board system is....sorry.
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what are the causes of fluctuations in the exchange rate
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The Zimbabwean has the highest foreign exchange rate.
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Forward exchange rate is the agreed upon exchange rate to be used in a forward trade.
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Exchange rate is depends on the rate of that country currency rates
and gold!
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what are the causes of exchange rate voltaility in pakistan
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The foreign exchange rate helps determine the value of money. When the exchange rate is high, then the currency is less valuable.
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The foreign exchange rate is also known as the exchange rate. This is defined as the difference between two currencies.
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The "MoneyCo" website contains a wide variety of currency that you may exchange as well as telling you the exchange rate of the currency. Their exchange rate actually differs from the common exchange rate of banks.
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interest rate decreases and exchange rate increases
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It is an uniikely exchange rate.
It is an uniikely exchange rate.
It is an uniikely exchange rate.
It is an uniikely exchange rate.
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http://www.x-rates.com/calculator.html is a terrific website. It has the current exchange rate as well as graphs of the history of the exchange rate.
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an exchange rate is how much country's currency is worth in term of anothers.
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As of today, the exchange rate is $1 to 43.24 pesos.
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The exchange rate is 12 to 1.
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The exchange rate of US to Euros is +0.522 %.
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Assuming all ones equal the exchange rate is ... 1.
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pegged exchange rate is officially fixed in terms of gold or any other currency in foreign exchange.
Floating exchange rate is flexible rate in which value of currency is allowed to adjust freely determined by the supply & demand of foreign exchange
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The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.
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Spain uses the Euro. See the related link for an exchange rate.
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one is unrealised and the other is realised
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how exchange-rate movements influence business decisions
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As of today, the current exchange rate for EUR/USD is 1.18.
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In forward exchange rate, the rate is booked in advance for a fixed amount and period,which will remain unchanged in case of any market fluctuation or deceleration.In fact forward exchange rate booking is done to protect or guard against volatile market condition.
In spot exchange rate, the exchange rate prevalent on a particular date is booked for immediate effect.
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The US foreign exchange rate varies greatly depending on the country and currency. The current foreign exchange rate for euros is 0.77 euros per USD. The current foreign exchange rate for CAD is 1.02 CAD per USD.
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Currency exchange involves the buying and selling of different currencies. The exchange rate is the value of one currency in terms of another. Factors that influence the exchange rate include interest rates, inflation, political stability, economic performance, and market speculation. These factors can cause the exchange rate to fluctuate.
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A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
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Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another
Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
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