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  • Exchange Rate Determination

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    Gul Samarth Mohan
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    The document discusses the history and mechanisms of international exchange rates. It describes how the IMF was formed in 1945 to promote exchange rate stability and currency flows between countries. Exchange rate arrangements can include hard pegs like dollarization or currency boards, soft pegs, or floating rates. Exchange rates are determined by factors like a country's intervention in currency markets, controls on currency convertibility, and relationships between inflation, interest rates, and exchange rate movements. Forecasting models use both fundamental economic analysis and technical indicators.

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    The document discusses the history and mechanisms of international exchange rates. It describes how the IMF was formed in 1945 to promote exchange rate stability and currency flows between countries. Exchange rate arrangements can include hard pegs like dollarization or currency boards, soft pegs, or floating rates. Exchange rates are determined by factors like a country's intervention in currency markets, controls on currency convertibility, and relationships between inflation, interest rates, and exchange rate movements. Forecasting models use both fundamental economic analysis and technical indicators.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views7 pages

    Exchange Rate Determination

    Uploaded by

    Gul Samarth Mohan
    The document discusses the history and mechanisms of international exchange rates. It describes how the IMF was formed in 1945 to promote exchange rate stability and currency flows between countries. Exchange rate arrangements can include hard pegs like dollarization or currency boards, soft pegs, or floating rates. Exchange rates are determined by factors like a country's intervention in currency markets, controls on currency convertibility, and relationships between inflation, interest rates, and exchange rate movements. Forecasting models use both fundamental economic analysis and technical indicators.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 7

    Exchange Rate

    determination
    Some basic facts
    • IMF came into existence in 1945 with the aim of promoting exchange
    rate stability and fluctuation international flow of currencies
    • Bretton Woods and the principle of par value
    • IMF Quotas and Special Drawing Rights (SDRs)
    Exchange rate arrangements
    • Hard Peg
    Dollarisation and Currency Boards

    • Soft Peg

    • Floating
    Floating and free floating
    Determination of Exchange Rate
    • Non intervention: Floating exchange rate
    • With intervention: Fixed rate of managed floating
    • Convertibility and hard and soft currencies
    • Controlling convertibility: licenses, multiple exchange rates, import
    deposits, quantity restrictions
    • Purchasing Power Parity and the Big Mac index
    Inflation, Interest rates and Exchange rates
    • Fisher Effect
    • International Fisher Effect
    Exchange rate forecasting
    • Fundamental
    • Technical

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