• Currency Board
    currency in the domestic market will push the exchange rate back to the natural value. This is in effect one of the main advantages of the linked exchange rate regime. However, the disadvantage is lost the ability of self-control. The Fixed Exchange Rate A country's exchange rate regime under which the...
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  • Critical Comparison of Fixed and Floating Exchange Rate Mechanisms
    Introduction This paper will examine independently floating exchange rate arrangements and other conventional fixed peg arrangements in separate sections. Each section contains four parts: • An examination of the mechanics of the regime; • A discussion of its advantages and disadvantages; • An...
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  • International Monetary System
    Bretton Woods system after the WWII, and the hybrid system of managed floating exchange rate regime now operating since 1973. We will highlight the advantages and disadvantages of the fixed and floating exchange rate systems. Main concepts of the lesson: The international monetary system Current account...
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  • Foreign Exchange
    $ rises and supply of S$ increases. This is so as Singapore importers supply more S$ to buy US$ to pay for imports. The foreign exchange rate rises to US$1 = S$2.50 (S$1 = US$0.40). The US$ has appreciated and the S$ has depreciated. b. What are the 2 advantages and disadvantages of this...
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  • Fixed vs Floating Interest Rate
    maintain an independent monetary policy, but with a floating exchange currency. Conclusions Both floating and fixed exchange rates regimes have its advantages and disadvantages. The floating exchange rate provides with greater the risk of currency fluctuations which is harmful to foreign traders and...
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  • Exchange Rate Policy
    Table of contents 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...
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  • Words for Global Strategy
    foreign country. Foreign portfolio investment Investment by individuals, firms, or public bodies in foreign financial instruments (e.g., government bonds, foreign stocks) Advantage and disadvantage of export Advantage: Avoid the costs of establishing manufacturing operations in the host...
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  • Exchange Rates
    Organisation (WTO), they moved away from fixed exchange rates after the Exchange Rate Mechanism (ERM) Crises but the main motive to restore world trade stayed the same. The move away from fixed exchange rates can be explained by the many advantages of a freely floating exchange rate regime. Whereas...
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  • Exchange Rate Mechanisms
    mistake to ignore the market signals. Managed float provides a middle ground where one can have the benefit of exchange rate flexibility without excessive instability. The following sentence is discuss the advantages of float manage regime. Increase Foreign Investment- Increasing the foreign...
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  • The Costs and the Benefits of Hong Kong’ Currency Board System
    the more sceptical side, the IMF examined the evidence on the link between financial deficits and exchange rate regimes in developing countries and concluded that it was equivocal and differed from one country group to another. Disadvantages of currency boards Williamson (1995) pointed out...
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  • Study Q
    foreign exchange intervention, conduct an offsetting open market operation * There is no effect on the monetary base and no effect on the exchange rate 2. Explain the advantages and disadvantages of the exchange rate targeting. Explain the Currency Board along with its advantages and...
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  • Explain how the International Gold Standard that emerged in the half-century before 1914 can be interpreted as a system of ‘fixed exchange rates’
    Explain how the International Gold Standard that emerged in the half-century before 1914 can be interpreted as a system of ‘fixed exchange rates’. Hence discuss the advantages and disadvantages of the Gold Standard as a policy regime. The International Gold Standard that emerged during the...
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  • Floating vs Fixed Exchange Rate
    stability and to avoid inflation; however, it is less often that the central bank of a floating regime will interfere. Answer Fixed vs. Flexible Fixed advantages A fixed exchange rate should reduce uncertainties for all economic agents in the country. As businesses have the perfect...
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  • Relationship Between Inflation and Exchange Rate
    the government has to make measures to ensure that inflation is low, in order to keep its businesses competitive on foreign markets, which is an advantage of a fixed rate. The fixed exchange rate has its disadvantages, because if the exchange rate is in danger of a fall, the government has to raise...
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  • financial markets
    as the euro, the yen or a basket of currencies). In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged. Advantages and Disadvantages of Fixed and Floating Exchange Rates...
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  • International Financial Market
    more strategic and equivalent condition with other countries exporters (Republic of Turkey Ministry of Economy, 2012). This will help to raise growth in more joint investments. Turkey’s exchange control regime is a liberal one (Yased, 2008). There are advantages and disadvantages to this flexible...
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  • China Currency Exchange Rate
    Question 4a The currency regime adopted by China is neither fixed nor flexible exchange rate system. China has announced in 2005 the “end of its firm peg against the dollar, instead allowing it to trade within a narrow band against a basket of currencies.” China regime is managed floating...
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  • World Economics
    to rise and fall, but it is subject to government control if it moves too high or too low. With managed float, the government steps into the foreign exchange market and buys or sells whatever currency is necessary keep the exchange rate within desired limits Q Advantages and Disadvantages of...
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  • How Exchange Rate Targeting by the Central Bank Can Affect the Balance of Payment Position of a Country
    regime for small open developing economies is still widely discussed. The advantages and disadvantages of different exchange rate regimes are far too many to be readily captured and used to come up with a specific regime that suits the needs of all. Real exchange rate is perhaps the most popular real...
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  • Business Decision Analysis
    Exchange Rates (disadvantages of floating rates) Fixed rates provide greater certainty for exporters and importers and under normally circumstances there is less speculative activity - although this depends on whether the dealers in the foreign exchange markets regard a given fixed exchange rate as...
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