show that foreign exchange reserves of Pakistan have a positive impact on KSE Stock Market that is the principal stock market of Pakistan. Introduction This research is carried out to find the impact of foreign exchange reserves held by the State Bank of Pakistan on the investment and performance of stock markets of Pakistan. There are three stock exchanges (Karachi Stock Exchange‚ Lahore Stock Exchange and Islam-Abad Stock Exchange) operating in Pakistan. Karachi Stock Exchange (KSE) is premier
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Exchange Rate Systems QUESTIONS 3. What is likely to be the most credible exchange rate system? Answer: Among fixed exchange rate systems‚ a monetary union with a common currency is likely the most credible exchange rate system. 8. How can a central bank peg the value of its currency relative to another currency? Answer: To peg the value of its currency to another currency‚ the government must make a market in the two currencies. If there is excess supply of the foreign currency (which is equivalent
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Legal Studies University of Alabama‚ Box 870224 Tuscaloosa‚ AL 35487 Phone: 205-348-8971 Fax: 205-348-0590 Email: chueng@cba.ua.edu Are Policy Rules Better than the Discretionary System in Taiwan? ABSTRACT This paper investigates whether the central bank of Taiwan would have had a more successful monetary policy during the period 1971:1 to 1997:4 if it had followed an optimal rule rather than the discretionary policies that were actually employed. The paper examines the use of two different instruments—the
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system of 12 regional U.S. banks‚ which act as the Central Bank. The capital of the Federal Reserve was established through the sale of shares to private commercial banks‚ which became its members. The main functions of the Federal Reserve are: to issue banknotes; keep the required reserves of member banks of the Federal Reserve; give loans to commercial banks and rediscount; purchase of government securities; cash services to the federal budget; implementation of inter-bank clearing; operations with
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government. People’s Bank of China (PBC)‚ being the only bank simply received instructions from the government about the allocation of the funds.[1] However‚ things took a change when the four specialized banks namely the Industrial and Commercial Bank of China‚ the Agricultural Bank of China‚ Bank of China and the China Construction Bank were converted into state-owned commercial banks in the late 1970s. With the transformation‚ commercial loans were being made and this brings the banks to the issue on
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conducted by central banks? During the period of 1986 to 1991‚ the Japanese economy was experiencing an economic bubble that was characterized by highly inflated real estate and stock prices. The subsequent effects of the bubble’s inevitable collapse lasted over a decade with the stock prices reaching their lowest values during the year 2003. It was during this recessionary period of the early 2000s that the Japanese government began to purchase long-term government debt from banks as a means to
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fractional-reserve banking is the near-universal practice of banks of retaining only a fraction of their deposits to satisfy demands for withdrawals‚ lending the remainder at interest to obtain income that can be used to pay interest to depositors and provide profits for the banks’ owners. Fractional-reserve banking allows for the possibility of a bank run in which the depositors collectively attempt to withdraw more money than is in the possession of the bank‚ leading to bankruptcy. It also increases the money
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1. Type of basic mechanisms for exchange rates a). Free float Free floating or clean float is a type of country’s exchange rate regime where a currency’s value is allowed to fluctuate according to the foreign exchange market. Free floating exchange rate is determined by the interaction of currency supplies and demands with no government intervention. It always termed “self- correcting’ as if any differences in supply and demand‚ the exchange rate will automatically be corrected in the market
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insight of the PBOC’s Concretionary Monetary Policy 03 – 20 - 2011 As part of the China’s Monetary Policy team‚ most contributions were made on a shared basis with Ms. Fion Lau focusing on current policy implemented and tools used by the People’s Bank of China (PBOC) Benefited by Fion’s financial industry experience and access to various source including Bloomberg terminal‚ the data obtained is well collected and analyzed. Similar to that of the Federal Reserve‚ China’s monetary policy are designed
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Part B – Macroeconomics Question 10: a) Which of the following are final goods and services and which are intermediate goods and services? Please explain why in your answer. i) A windscreen purchased by a motor vehicle spare parts supplier; Intermediate goods – by national accounts (GDP) windscreen primary production value has already been accounted. It is being resold at a deflated value as second hand goods. ii) A new bulldozer to be used by a construction
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