inflation post reform period till 2008-09. 4. Drastic reduction in Non-Performing Asset level of the bank (NPA) and significant improvement in Capital-to-Risk adjusted Asset Ratio (CRAR) of the banks 5. In external sectors‚ merchandise exports‚ FOREX reserves and trade with outside world has increased to a greater extent. 6. Poverty level has come down from 36% to around 27% as of 2004-05. Macroeconomic reforms 1. Fiscal reforms: Government gradually brought down various taxes like personal income
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Readings and Framework SS 4 ¾ R14 Currency exchange rate: determination and forecasting ¾ R15 Economic Growth and investment decision ¾ R16 Economics of Regulation 4-94 91 100% Contribution Breeds Professionalism Economics for Valuation Reading 14: Currency exchange rate: determination and forecasting 5-94 91 100% Contribution Breeds Professionalism R14. Currency Exchange Rates Warm-up ¾ Exchange rate is simply the price or cost of units of one currency in terms of another. ¾ Nominal exchange
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crises were the results of weak economic fundamentals‚ for examples‚ declining foreign reserve‚ increasing foreign debt‚ capital account and current account deficits‚ fiscal deficit‚ and so on. Obviously‚ a current account deficit can be a very important factor because‚ other things being equal‚ it increases foreign debt‚ decreases foreign reserves‚ and weakens confidence in the exchange rate of the domestic currency. Almost all countries that suffered financial crises had faced rising current account deficits
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Exchange Risk Currency risk is also called the foreign exchange risk or foreign exchange exposure‚ refers to a period of international economic transactions in foreign currency-denominated assets (or creditor) and liabilities (or debt)‚ caused by fluctuations in the exchange rate and its value will go up and possibilities. Risk of stake-holder including government‚ enterprises‚ banks‚ individuals and other sectors‚ they are facing the risk of exchange rate fluctuations. Classification 1. Transaction
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Russia Exchange rate system Russia used to pledge its nominal exchange rate with some main currencies such as US dollar. However‚ the Russian crisis has forced Russia to develop managed floating exchange rate system‚ where the exchange rate driven by market forces of the Ruble’s demand and supply with the help of government intervention. With this exchange rate‚ the government can ensure stability and predictability of ruble exchange rate and prevent abrupt fluctuation of the Ruble rate. Moreover
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CDRI - Cambodia’s Leading Independent Development Policy Research Institute Policy brief Jayant Menon *‚ a) 2008 ‚ N o . 01 De-Dollarising Cambodia: 10 Years On “For a long time it seemed that the extent of… dollarization was impervious to improved economic performance. Now however we have several examples of countries that have dedollarized successfully… including Israel‚ Poland‚ Mexico‚ Egypt‚ and Turkey. And some signs of declining dollarization are evident in Latin American countries
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financial system became a necessity. In order to create a harmonious world community in which the population of every nation will be able to realize their strengths and weaknesses and to create a long lasting peace the idea of stabilization of world currency was introduced in Bretton Woods International Monetary Conference in 1944 (Das‚ 2003). The then US president Franklin Roosevelt has invited the delegates of 44 allies and members associate countries at Bretton Woods New Hampshire on the opening of
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How the value of dollar is vaporized Throughout the history of currency‚ the true value of money has always been changing. Even today‚ the value of dollar is changing every day. It is hard to define the value of money‚ for economists‚ they may use gold/silver standard to value money; but in order to be closer to everyday life‚ I will use “milk” as a rule for measuring the purchasing power of money. Milk as an agricultural product‚ its production does not affect by the improvement of technology
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Problems 50 8. International Equity Markets Suggested Answers and Solutions to End-of-Chapter Questions and Problems 56 9. Futures and Options on Foreign Exchange Suggested Answers and Solutions to End-of-Chapter Questions and Problems 62 10. Currency and Interest Rate Swaps Suggested Answers and Solutions to End-of-Chapter Questions and Problems 70 11. International Portfolio Investments Suggested Answers and Solutions to End-of-Chapter Questions and Problems 78 12. Management of Economic
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Mundell -Fleming Model The Mundell–Fleming model‚ also known as the IS-LM-BP model‚ is an economic model first set forth (independently) by Robert Mundell and Marcus Fleming The model is an extension of the IS-LM model. Whereas the traditional IS-LM Model deals with a closed economy‚ the Mundell–Fleming model describes an open economy. The Mundell-Fleming model portrays the short-run relationship between an economy’s nominal exchange rate‚ interest rate‚ and output (in contrast to the closed-economy
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