In the report “Exchange Rate Regime – Korea” the author discusses the concept of real exchange rate regime, which can be attributed to the method which is employed by the government of different countries for the purpose of administering…
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On May 3, 1964, there was abolition of the official rate of Korean currency whose official rate was Won (W) 130.00 per U.S. dollar with an establishment of a unitary floating system was established on a basic rate of around W 255.00 per US dollar. There was also introduction of foreign exchange certificates that were issued by the Bank of Korea against foreign currencies that could be sold in a free market. In November 1964, there was extension in the foreign exchange certificate system for covering practically foreign exchange dealings. With the establishment of fluctuating certificate rate system in the year 1971, there has been dynamic depreciation in the Korean currency. With the devaluation in US dollar there has been reduction in the gold content of Korean currency by a percentage of 7.89%. In the month of February, the currency of Korea established link with the U.S. dollar was being controlled and there was establishment of a floating exchange rate regime ( a regime where the exchange rate is freely determined by the foreign exchange market). Running a single currency peg against the US dollar there was introduction of multiple currency basket peg in Korea in 1980.The effective rate was associated with SDR (special drawing rights) along with the combination with basket of the currencies of the major trading partners of South Korea and they are namely USA, Japan, Germany and Canada. From the year 1989, the exchange rate of Korea was being allowed to fluctuate within a percentage range against the basic rate. In the month of March 1990, there was replacement of effective rate by a market average rate (MAR). There was a managed floating exchange rate regime with determination of market forces in the interbank market and the Seoul Foreign Exchange Market. Under the system of MAR, there were fluctuations in currency of Korea being restricted within a narrow band.
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The aim of this study is to restate the stand of the most influential monetary institution in the world especially when it comes to global trade: consider an economy’s unique situation before opting for an exchange rate. Strengthening an economy’s monetary and fiscal policies are key determinants of economic growth.
China has benefited immensely from the international trade. According to Bradsher (2010), China is one of the countries that enjoys trade surplus and high level of foreign exchange reserves in the world. In 2009, China had a trade surplus of $198 billion with the rest of the world.
It has therefore also become a policy problem for not only the governments but also for the economists to underline a systematic approach to tackle the issue of balance of payment disequilibrium. (Kenen, 2000) The interrelationship between the balance of payments and the exchange rate regimes is one of the key relationships in economics.
The purpose of this assignment is to analyze macroeconomics basic concepts. This assignment is a review of an existing article titled EXCHANGE RATE REGIME TRANSITION DYNAMICS IN SOUTHEAST ASIA by Monzur Hossain. This paper has investigated the currency regime choices of six Southeast Asian Countries.
However, by 2001 peso was devalued against the dollar, output decreased significantly, government defaulted on its debt, and inflation returned (IMF 2003, p.3). Fixed exchange regime, once deemed crucial to fighting inflation, turned the country’s seeming stability into a disaster.
This model is among the most popular standard macro models that explains different characteristics of an open economy. An open economy is an economy in which a country trades with other countries in goods, services, and financial assets (Redseth 2000). Most of the economies in the current world are open due to globalization of trade.
However, the administration was carried out with the cooperation of the Ministry of International Trade (MITI) and Industry and the bank of Japan. MITI also handled licenses related to exports and imports. However, the authority for approving major payments was given to the authorized banks in Japan.
Malay, Mon and Khmer civilizations flourished in the reason prior to the arrival of ethnic “Tai”. Geographically the area of Thailand is 513,115 sq. km; equivalent to the size of France, or slightly smaller than Texas. Beautiful city of Bangkok is the capital of
mitted to Kazakhstan through channels which include, "lost competitiveness, shrinking bilateral and global markets, terms of trade shocks and shifting foreign direct investments"(Ohno and Zhakparova, 1999, p.1).With the adoption of floating regime, temporary non-market steps