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What is SRD or Special Drawing Rights?

Special Drawing Rights is a reserve asset created by the IMF in order to supplement it’s
member countries official reserves. Its role is that it can provide a country with liquidity.

The World Bank assists developing countries through medium – and long-term loans and
advisory services aimed at promoting long – term economic growth that reduces poverty.
The IMF works to stabilize the international monetary system and monitors the world’s
currencies. It promotes international monetary cooperation and foreign exchange stability
and provides short – term loans to countries experiencing balance of payments problems.
the World Bank is primarily a development institution while the IMF is a cooperative
institution that seeks to maintain a functioning system of payments between nations;

Reserved currency?
 It is widely used to conduct international trade and financial transactions, eliminating the costs
of settling transactions involving different currencies.
Pool gold?
One of the cheapest ways to buy and store physical gold and silver is with unallocated (or pool)
storage. With unallocated storage, a dealer holds metal that is owned by its customers, but
without identifying any particular piece of metal belonging to any particular customer.
Exchange rate floating?
A floating exchange rate is a regime where the currency price of a nation is set by the forex
market based on supply and demand relative to other currencies. This is in contrast to a
fixed exchange rate, in which the government entirely or predominantly determines the rate
International reserved currency?
A reserve currency is a large amount of currency held by central banks and major financial
institutions to use for international transactions. A reserve currency reduces exchange rate
risk since there's no need for a country to exchange its currency for the reserve currency to do
trade.

IMF mission and objectives?


The IMF has three critical missions: furthering international monetary cooperation,
encouraging the expansion of trade and economic growth, and discouraging policies that
would harm prosperity.
IMF main functions
Regulative, financial and consultative functions
Rapid Credit Facility (RCF)

The RCF provides concessional, rapid, and low-access financial assistance to qualifying LICs
facing an urgent balance of payments need, without ex post conditionality. 

Policy Coordonation Instrument (PCI)

Is designed to assist countries in formulating and implementing macroeconomic policy


programs.

Why a weak currency stimulates exports and therefore improves the balance of trade?
A weak currency makes a country's exports cheaper for foreign buyers, making them more
attractive and therefore increasing demand for those exports. This increased demand for
exports can help to improve a country's balance of trade, as the value of exports exceeds
the value of imports.
Stand by Credit Facility (SCF)
The Standby Credit Facility (SCF) provides financial assistance to low-income countries
(LICs) with short-term balance of payments needs

Nominal coverage criteria


Examples of nominal coverage criteria include market production, transactions, and activities
that have a monetary value.
Real economic coverage
Examples of real economic coverage are Real GDP, Real National Income, Real Gross Value
Added etc.

Capital markets: Capital markets are markets for long-term investments, such as stocks, bonds,
and real estate. They are used by investors who are looking to invest in companies or
government entities in the hopes of earning a return on their investment over a period of time.
Capital markets are also where companies can raise money by issuing securities, such as stocks
or bonds.
Money markets: Money markets are markets for short-term investments, such as Treasury bills,
commercial paper, and certificates of deposit. They are used by investors who are looking for a
safe and secure place to invest their money for a short period of time, typically less than a year.
Money markets are also used by companies, governments, and other entities as a way to raise
short-term funding.

In summary, capital markets are for long-term investments and money markets for short-term
investments and also capital markets are for raising capital for companies and governments, and
money markets are for short-term funding needs.

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