PPT-Chapter 18 Fixed Exchange Rates and

Foreign Exchange Intervention 18 2 Preview Balance sheets of central banks Intervention in the foreign exchange markets and the money supply How the central bank fixes the exchange rate Monetary and fiscal policies under fixed exchange rates. There are two “pure” types of exchange-rate systems:. Flexible Exchange Rates - a flexible, or floating-exchange-rate system, through which demand and supply determine exchange rates and in which no government intervention occurs.. Two polar cases. Fixed (pegged) exchange rates. CB buys or sells reserves to maintain a set price of foreign exchange. Flexible exchange rates. CB does not intervene in market for foreign exchange. and . Currency Exchange Rates. Presenter’s name. Presenter’s title. dd. Month . yyyy. 1. Introduction. The . foreign exchange (FX) market . is the market for trading currencies against each other.. The FX market is the world’s largest market.. Currency Exchange Rates: Determination and Forecasting. Presenter’s name. Presenter’s title. dd. Month . yyyy. 1. Introduction. An . exchange rate . is the price of one currency in terms of another.. In international trade it becomes necessary for individuals in different countries who want to buy and sell from one another to exchange currencies. There are approximately 150 different currencies in circulation in the world today. In the process of trading between nations, foreign exchanges of currency must be made.. 4/2/2012. Unit 3: Exchange Rates. Exchange Rate Regimes. fixed exchange rate . –. a currency's value is matched to the value of another single currency or to a commodity (e.g., gold). floating exchange rate . International Monetary Relations. Professor Malamud. BEH 502 895 – 3294 . Email: . bernard.malamud@unlv.edu. Website: . http://faculty.unlv.edu/bmalamud. . Office . Hours:TTh. 1 – 2 pm. ; . 4 – 5 pm. International Monetary Experience. Prepared by:. Fernando Quijano. Dickinson State University. 19. 1. Exchange Rate. Regime Choice: . Key Issues. 2. Other Benefits. of Fixing. 3. Fixed Exchange. Rate Systems. Professor Malamud. BEH 502 895 – 3294 . Email: . bernard.malamud@unlv.edu. Website: . http://faculty.unlv.edu/bmalamud. . Office . Hours:MW. 11:30 – 12:30 pm; 2:30 - 3:30 pm; and by appointment. Professor Malamud. BEH 502 895 – 3294 . Email: . bernard.malamud@unlv.edu. Website: . http://faculty.unlv.edu/bmalamud. . Office . Hours:TTh. 1 – 2 pm. ; . 4 – 5 pm. ; and by appointment. International Monetary Relations. Table 14-1: Exchange Rate Quotations. Value of $1.00. Domestic and Foreign . C. urrencies. In these lectures, . domestic currency. refers to the US dollar. Foreign currency . refers to the Euro, or at times to the Yen or the Yuan. Why do some countries choose to fix. and others to float? Why do they. change their minds at different times?. These are among the most enduring and controversial questions in international macroeconomics.. RATe. An . exchange rate regime, also known as the pegged exchange rate, wherein the government and central bank attempts to keep the value of the currency is fixed against the value of other currencies, is called fixed exchange rate. . Chapter 18 . Krugman. and . Obstfeld. 9e. ECO41 International Economics. Udayan. Roy. Why Study Fixed Exchange Rates?. Four reasons to study fixed exchange rates:. Managed floating. Regional currency arrangements.