Reserve currency

Mandate of IMF at that Time: 1. It should stabilize and establish a clear and single value for each currency. 2. Encourage unrestricted convergence of one currency into another. 3. oppose practices as comparative devaluation (The effect of comparative devaluation: There was shift in investment flow that has totally restricted the trade) 4. There immediate post war objective

Exchange Rate The exchange rate between countries determines one currency’s strength in comparison to another. These rates also oversee the economic growth and the currency purchasing power of countries. Therefore, exchange rates are vital in ensuring that one country can maintain its value versus the US dollar which is the most dominant currency. Currently, the Euro/USD exchange rate is at 1.0666. This paper strives to give clear predictions on the value of the Euro against the USD short term and long

foreign capital holdings. U.S. dollar devaluation motivates foreign capital flow into Chinese markets. There is a graph about China’s official foreign exchange reserves (1985-2006). Table China’s official foreign exchange reserves (1985-2006) Source: National Bureau of Statistics of China (2007). The graph describes the foreign exchange reserves in China which expressed a dramatic increase between 1985 and 2006. Due to the Chinese economy development, an increasing number of foreign investments are

Commonly referred to as the “Asian Contagion” the East Asian financial crisis of 1997 marked a time in which multiple Asian countries fell into a recession as a result of financialization. Although the East Asian financial crisis affected over ten countries, Thailand’s economy is will first be primarily analyzed prior to the crash because it was the first economy to fall and essentially started the crisis. In retrospect, the complexity of the financial crisis has caused much debate on what actually

“A U.S. dollar is an IOU from the Federal Reserve Bank. It's a promissory note that doesn't actually promise anything. It's not backed by gold or silver.” This small quote can accurately describe the current American economical situation. It is bluntly states that the U.S dollar is worth only the paper it is printed on. In contrast to other countries who back their money with their current gold reserves. But the quote also references a different period of time in the history of the U.S. the time

there is a possibility of being far from the equilibrium exchange rate for some time. In a fixed exchange rate regime, especially if the trade of a country is concentrated with those major currencies, the cross-rate fluctuation (the fluctuations of the anchor currency against other major currencies) is another severe flaw. For example, the Persian Gulf oil exporting countries follow a peg exchange rate to the US dollar and have most of their trade with Europe and Japan. In 1997, the appreciation

The Alarming Reality of the United States National Debt One trillion dollars is an astounding amount of money. What if I told you that the United States of America is in debt not just one trillion dollars, but nineteen trillion dollars in debt, as of 2016. As time goes on, the United States only continues to rack up more and more debt. It is estimated that in just 4 years, our national debt will increase by about 2 trillion dollars. The truth is, our country has been battling debt ever since it was

China’s Renminbi: “Our Currency, Your Problem” Our Currency, Your Problem is a case involving the issue of exchange rate regimes and the impact currency manipulation has on economies and trade. The United States and Europe argued that the Renminbi (RMB) was undervalued and claimed that the People’s Bank of China (PBoC) deliberately manipulated the exchange rate to lower the prices of exports, which caused the US and Europe to run huge trade deficits with China. The US and

During the second half of 1997, currencies and stock market prices plunged in value across Southeast Asia, beginning in a. Thailand b. Malaysia c. Indonesia d. South Korea 2.7 When monetary authorities have not insulated their domestic money supplies from the foreign exchange transactions, it is known as ________ intervention. a. unsterilized b. sterilized c. foreign market d. subsidized 8. When the U.S. Federal Reserve sells or purchases Treasury

East Asian financial crisis are an evidence of fact that economies are prone to fianacial pressures in spite of a stable sustainable growth rate. The East Asian economic crisis is the most important economic event in the region of the past few decades. That much is agreed. Beyond this, there is yet no unanimity about its root causes nor about the solutions. The differences of views are being debated in academic and policy circles and reflected in the media. One thing though is certain: the earlier