Professional Documents
Culture Documents
The
International
Monetary System
Learning Objectives
Explore how the international monetary system
has evolved from the days of the gold standard
to todays eclectic currency arrangement
Detail how the International Monetary Fund
categorizes the many different exchange rate
regimes operating across the globe today
Examine how the choice of fixed versus flexible
exchange rate regimes is made by a country in
the context of its desires for economic and
social independence and openness
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Learning Objectives
Explain the dramatic choices the creation of
a single currency for Europethe euro
required of the European Unions member
states
Study the complexity of exchange rate
regime choices faced by many emerging
market countries today
Describe the detailed strategy being
deployed by China in the gradual
globalization of the Chinese renminbi
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Category 4: Residual
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A Global Eclectic
As illustrated by Exhibit 2.5, the proportion
of IMF member countries with floating
regimes has been holding at about 34%.
Soft pegs continue to dominate.
Although the contemporary international
monetary system is typically referred to as a
floating regime, it is clearly not the case
for the majority of the worlds nations.
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inflation,
unemployment,
interest rate levels,
trade balances, and
economic growth.
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The offshore market for the RMB has grown out of a Hong
Kong base (CNH, an unofficial symbol).
This offshore market has enjoyed preferred access to the onshore
market by government regulators, both in acquiring funds and reinjecting funds (back-flow).
Growth in this market has been fueled by the issuance of RMBdenominated debt.
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