active in the seventies‚ consequent upon the collapse of Bretton Woods Agreement. However‚ India was somewhat insulated since stringent exchange controls prevailed and banks were required to undertake only cover operations and maintain a ‘square’ or ‘near square’ position at all times. In 1978‚ the RBI allowed banks to undertake intra-day trading in foreign exchange and as a consequence‚ the stipulation of maintaining `square’ or `near square’ position was to be complied with only at the close of business
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and credit policies. * Management of Bangladesh’s international reserves. * Issuance of currency notes. * Regulation and supervision of banks and non-bank financial institutions‚ promotion and development of domestic financial markets. * Acting as banker to the Bangladesh government. * Regulation and supervision of the payment system. * Money laundering prevention. * Implementation of Foreign Exchange Regulation Act. * Managing a Deposit Insurance Scheme. * Collection
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Blinder’s Macroeconomics Ch 14: Differing Views on Fiscal and Monetary Policy Monetary Velocity indicates the number of times per year that an “average dollar” is spent on goods and services. . Formula: Velocity = Nominal GDP/Money supply Equation of Exchange: Money Supply x Velocity = Nominal GDP (= Price Level x Real GDP) or M x V = P x Y The quantity of the money supply affects GDP‚ but not directly. For example‚ raising the money supply would decrease velocity‚ canceling out the effects. The quantity
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ASSIGNMENT FINAL REPORT TOPIC: CAPITAL ACCOUNT CONVERTIBILITY ABSTRACT This report has been prepared to discuss the issue of Capital Account Convertibility (CAC) and India’s experience with it. The concept of CAC and its history and its implications has been discussed. The recommendations of the Tarapore Committee (the committee set up for looking into the issue of CAC) have been presented. Lastly‚ the progress
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Section 2 in this paper will offer background information of the Linked Exchange Rate System. It defines how the monetary authorities defend the currency peg. Section 3 will summarize on how and why the Hong Kong dollar was under speculative attacks during the Asian Financial Crisis. Section 4 is a postscript on how the HK government reacts to the situation and the actions that was taken. II. The Background of the Linked Exchange Rate SystemAs a small opened economy‚ the currency of Hong Kong was used
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Convertibility in India Executive Summary Capital Account Convertibility is considered the hallmark of a developed economy. CAC‚ as defined by Tarapore committee is the freedom to convert local financial assets into foreign financial assets and vice versa at market determined rates of exchange. CAC is in line with the classical theory of economics where markets clear itself and attain equilibrium prices by creating demand for the given supply levels. This assumes the presence of an invisible hand enabling
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friendship and co-operation of each other. Executive Summary In international trade ‘Currency Derivatives’ is a familiar thing‚ (Multinational Corporations) MNCs use forward contract is an agreement between a corporation and a commercial bank to exchange a specified amount of a currency at a
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characterised by great changes in the international financial system‚ beginning with the use for gold and silver in the bimetallism era‚ through the gold standard the gold exchange standard ‚ the Bretton Woods system and the current floating exchange rates. Arguably gold id the oldest metal used both as store of value and as a medium of exchange as realised in the early Egyptian Pharaohs’’ (3000 B.C)‚ who stored wealth in gold and traded with other likewise‚ according to Prayer (1982). Definitions
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Question : The interest parity condition: Student Answer: can be used to explain how the exchange rate is determined. simply means that the expected returns on both dollar assets and foreign assets. both of the above. none of the above. Points Received: 2 of 2 Comments: Question 5. Question : The starting point for understanding how exchange rates are determined is a simple idea called _______‚ which states that if two countries produce an
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difficulties. The crisis forced most Asian currencies to depreciate precipitously in a short period‚ and their currencies’ exchange rate against the dollar dropped between 10% to 70%. The change in foreign exchange market also affected the Asian stock market‚ and caused stock prices to slump by more than 30%. Besides‚ combined with the severe inflation and withdrawals from foreign investors‚ the speed of the Asian overall economic growth slowed down. The speed of economic growth in Thailand‚ Indonesia
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