have enough foreign investment causing the value of its currencies fall tremendously. Secondly‚ financial sectors with each country were operating very insufficiently and creating trouble in its Asian Economies. Thirdly‚ the crisis effects the US and the whole world. Resulting‚ the role of IMF have to attempt and investigate ways to cure the crisis. (Slide 2) Asian financial crisis happened in 1997. It first began attacked the Thailand currency‚ baht on May 14th and then follow by the collapse of
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Management at British Airways The overall foreign exchange position of a co. may be complex as illustrated in the case of BA. BA does business in approx. 140 foreign currencies‚ which account for approx. 60% of group revenue & 40% of operating expenses (the rest being UK sterling). The group generates a surplus in most of these currencies. The main exceptions are the US dollar & the pound sterling in which BA has a deficit‚ arising from capital expenditure on fuel‚ which is payable in US dollars‚ &
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imports. Spot exchange rate: The exchange rate at which a foreign exchange dealer will convert one currency into another that particular day. Carry trade: A kind of speculation that involves borrowing in one currency where interest rates are low‚ and then using the proceeds to invest in another currency where interest rates are high. Forward exchange: when two parties agree to exchange currency and execute a deal at some specific date in the future. (not definition‚ but worth knowing) Forward
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intervention to change the value of a currency? Explain why a central bank may desire to smooth exchange rate movements of its currency.. 2. Should the governments of Asian countries allow their currencies to float freely? What would be the advantages of letting their currencies float freely? What would be the disadvantages? 3. What is the impact of a weak home currency on the home economy‚ other things being equal? What is the impact of a strong home currency on the home economy‚ other things
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assets of country such as gold‚ foreign currencies‚ special drawing rights an reserve positions in the IMF. b) Discuss any two (2) methods a country can adopt to rectify the deficit in its deficit in its balance of payments. (4 marks) Two (2) methods a country can adopt to rectify the deficit in its balance of payments are:- i. Currency Depreciation Government should sell its currency in greater volume than the existing demand so the currency is much value. ii. Export and Import
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European currency have been compiled. For the success or failure of the single European currency much depends on the size of the effects described below. Do the gains from reduced transaction costs‚ the disappearance of exchange rate instability‚ and greater price transparency outweight the losses from the cost of introducing the new currency and possible macroeconomic adjustment costs? Judge for yourself: Arguments for a single European currency | Arguments against a single European currency | Transaction
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at an independent domestic branch. Accounting at the Head Office: The trial balance received by the Head Office from the foreign branch is in foreign currency. Therefore‚ before incorporating the items in the trial balance of the foreign branch‚ the Head Office is required to convert the various items in the trial balance into the currency of the Head Office. Thereafter‚ it has to incorporate the items in the Converted Branch Trial Balance in its books‚ prepare the Branch Trading and Profit and
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Topic: The effects on China’s economy due to fluctuation of exchange rate. 1. Introduction China’s economy is huge and expanding rapidly. In the last 30 years‚ the rate of Chinese economic growth has been almost miraculous‚ averaging 8 percent growth in Gross Domestic Product (GDP) per annum. The economy has grown more than 10 times during that period‚ with Chinese GDP reaching 3.42 trillion US dollars in 2007. China already has the biggest economy after the United States and most analysts
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the demise of the Zimbabwean dollar. In 2008 in an 18-month ‘experiment’‚ foreign currency was accepted as legal tender for transactions with a set number of retailers. “Honorable Members will be aware that in the hyper-inflationary environment characterizing the economy at present‚ our people are now using multiple currencies for day to day business transactions‚ alongside the Zimbabwe dollar. These currencies include the South African Rand (ZAR)‚ United States Dollar (USD)‚ Botswana Pula (BWP)
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less profit and earn less money. Consequently‚ U.S companies will pay fewer dividends for investors who invest in these companies. So‚ investors will tend to invest in foreign securities where they can get higher dividend. On the other hand‚ a weak currency can reduce unemployment but maybe it can lead to high inflation‚ and simultaneously it may reduce U.S imports and boost U.S exports or buy more goods than it sells abroad (imports exceed exports). Another thing‚ in the long run‚ trade deficits may
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