The CFO can forecast exchange rates by using either of two approaches‚ fundamental forecasting or technical forecasting. Fundamental forecasting uses trends in economic variables to predict future rates. The data can be plugged into an econometric model or evaluated on a more subjective basis. Technical forecasting uses past trends in exchange rates themselves to spot future trends in rates. Technical forecasters‚ or chartists‚ assume that if current exchange rates reflect all facts in the market
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DETERMINANTS OF EXCHANGE RATE FLUCTUATIONS FOR VENEZUELA: APPLICATION OF AN EXTENDED MUNDELL-FLEMING MODEL HSING‚ Yu* Abstract Applying and extending the Mundell-Fleming model‚ this study attempts to examine the behavior of short-term real exchange rates for Venezuela. It finds that the real effective exchange rate is positively associated with real government deficit spending and negatively influenced by real M2‚ the world interest rate‚ county risk‚ and the expected inflation rate. Hence‚ the
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China ’s Exchange Rate Peg concerning Trade Policy with U.S. Overview of the Problem The U.S. and China trade imbalance continue to be on the rise. U.S. manufacturing firms and workers voiced complaints over the competitive challenges posed by cheap Chinese imports. China ’s trade policy of pegging its currency‚ the yuan‚ to the U.S. dollar has enabled an unfair trade advantage according to the U.S. Some have gone as far as calling it "currency manipulation." The outcome has been loss of
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Introduction The rupee is the common name for the currencies of India‚ Pakistan‚ Sri Lanka‚ Nepal‚ Mauritius‚ Seychelles‚ Maldives‚ Indonesia and formally those of Burma and Afghanistan. Historically‚ the currency called “rupee” was introduced in the 16th century by Sher Shah Suri‚ founder of the Sur Empire of Northern India. The term Rupya‚ a Sanskrit term for silver coin‚ from Sanskrit rupa beautiful form. India was one of the first issuers of coins. The Indian rupee is the only tender in
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Impact of global recession and financial management challenges and strategies: For Indian Economy ABSTRACT:- ▪ The world is witnessing one of the most critical changes in global economy‚ communal‚ regional and national conflicts which is the worst recession of the century. This has made an impact on every sector and there is a need to battle these crises with a new mindset. ▪ The current slowdown‚ which world is witnessing‚ is cyclical‚ which happens every 10 years. The last time it
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Pages 1. Introduction 2 2. Exchange control and its uses 2 2.1 . Disadvantages of tightly managed exchange control 2.2 . Advantages of flexible exchange controls 2.3 . Disadvantages of flexible exchange controls 3. Emerging markets and exchange control 3 4. South Africa and exchange controls 3 5. Conclusion 5 6. References 6 List of figure: Figure 1: Exchange rate forecast 4 Figure 2: Price of Brent crude
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Convertibility of rupee Convertibility can be related as the extent to which a country’s regulations allow free flow of money into and outside the country. For instance‚ in the case of India till 1990‚ one had to get permission from the Government or RBI as the case may be to procure foreign currency‚ say US Dollars‚ for any purpose. Be it import of raw material‚ travel abroad‚ procuring books or paying fees for a ward that pursues higher studies abroad. Similarly‚ any exporter who exports
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designing a new symbol for an Indian Rupee but it failed to ignite any excitement‚ either in India or abroad for the simple reason that Indian Rupee is a beleaguered currency now‚ for it has lost its sheen over the years. A rich title for a poor currency! The value of Indian Rupee has devalued greatly since independence‚ notwithstanding some small measly upswings against dollar sometimes which is touted as a strengthening Rupee. The fact is that the real value of rupee has touched its nadir With
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QUESTION ONE WHY MULTINATIONALS FIRMS MUST ASSESS THE BUSINESS ENVIRONMENT OF COUNTRIES THEY OPERATE AND INTEND TO OPERATE IN. Multinational Corporation/Firm is a business that produces or distributes products or services in one or more foreign countries by establishing a branch or affiliate there. These multinational Corporations operate in a complex business environment. Cultural‚ social‚ economic‚ political and technological systems vary from country to country. In order to operate successfully
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two consequent devaluation of the rupee. These crises were in 1966 and 1991. The 1966 Devaluation Despite government attempts to obtain a positive trade balance‚ India has had consistent balance of payments deficits since the 1950s. The 1966 devaluation was the result of the first major financial crisis the government faced. Inflation had caused Indian prices to become much higher than world prices at the pre-devaluation exchange rate. When the exchange rate is fixed and a country experiences
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