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Free-floating Currency
In macroeconomics and economic policy, a floating exchange rate (also known as a fluctuating or flexible exchange rate) is a type of exchange rate regime in which a currency's value is allowed to fluctuate in response to foreign exchange market events. A currency that uses a floating exchange rate is known as a ''floating currency'', in contrast to a ''fixed currency'', the value of which is instead specified in terms of material goods, another currency, or a set of currencies (the idea of the last being to reduce currency fluctuations). In the modern world, most of the world's currencies are floating, and include the most widely traded currencies: the United States dollar, the euro, the Swiss franc, the Indian rupee, the pound sterling, the Japanese yen, and the Australian dollar. However, even with floating currencies, central banks often participate in markets to attempt to influence the value of floating exchange rates. The Canadian dollar most closely resembles a pure flo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Exchange Rate Arrangements Map
Exchange may refer to: Physics *Gas exchange is the movement of oxygen and carbon dioxide molecules from a region of higher concentration to a region of lower concentration. Places United States * Exchange, Indiana, an unincorporated community * Exchange, Missouri, an unincorporated community * Exchange, Pennsylvania, an unincorporated community * Exchange, West Virginia, an unincorporated community Elsewhere * Exchange Alley, in London, United Kingdom * Exchange District, a historic area in Winnipeg, Manitoba, Canada Business and economy *''Bureau de change'', a business whose customers exchange one currency for another *Cryptocurrency exchange, a business that allows customers to trade cryptocurrencies or digital currencies. *Digital currency exchangers (a.k.a. DCEs or Bitcoin exchanges), businesses that allow customers to trade digital currencies for other assets, such as conventional fiat money, or different digital currencies *Exchange (economics) *Exchange (organized mar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Canadian Dollar
The Canadian dollar ( symbol: $; code: CAD; french: dollar canadien) is the currency of Canada. It is abbreviated with the dollar sign $, there is no standard disambiguating form, but the abbreviation Can$ is often suggested by notable style guides for distinction from other dollar-denominated currencies. It is divided into 100 cents (¢). Owing to the image of a common loon on its reverse, the dollar coin, and sometimes the unit of currency itself, are sometimes referred to as the ''loonie'' by English-speaking Canadians and foreign exchange traders and analysts. Accounting for approximately 2% of all global reserves, the Canadian dollar is the fifth-most held reserve currency in the world, behind the U.S. dollar, the euro, the yen and sterling. The Canadian dollar is popular with central banks because of Canada's relative economic soundness, the Canadian government's strong sovereign position, and the stability of the country's legal and political systems. Histo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Asian Currency Crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1999 was rapid and worries of a meltdown subsided. The crisis started in Thailand (known in Thailand as the ''Tom Yam Kung crisis''; th, วิกฤตต้มยำกุ้ง) on 2 July, with the financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.S. dollar. Capital flight ensued almost immediately, beginning an international chain reaction. At the time, Thailand had acquired a burden of foreign debt. As the crisis spread, most of Southeast Asia and later South Korea and Japan saw slumping currencies, devalued stock markets and other asset prices, and a precipitous rise in private debt. South Korea, Indonesia and Thailand were ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Currency Crisis
A currency crisis is a type of financial crisis, and is often associated with a real economic crisis. A currency crisis raises the probability of a banking crisis or a default crisis. During a currency crisis the value of foreign denominated debt will rise drastically relative to the declining value of the home currency. Generally doubt exists as to whether a country's central bank has sufficient foreign exchange reserves to maintain the country's fixed exchange rate, if it has any. The crisis is often accompanied by a speculative attack in the foreign exchange market. A currency crisis results from chronic balance of payments deficits, and thus is also called a balance of payments crisis. Often such a crisis culminates in a devaluation of the currency. Financial institutions and the government will struggle to meet debt obligations and economic crisis may ensue. Causation also runs the other way. The probability of a currency crisis rises when a country is experiencing a banking ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Cycles
Business cycles are intervals of expansion followed by recession in economic activity. These changes have implications for the welfare of the broad population as well as for private institutions. Typically business cycles are measured by examining trends in a broad economic indicator such as Real Gross Domestic Production. Business cycle fluctuations are usually characterized by general upswings and downturns in a span of macroeconomic variables. The individual episodes of expansion/recession occur with changing duration and intensity over time. Typically their periodicity has a wide range from around 2 to 10 years (the technical phrase "stochastic cycle" is often used in statistics to describe this kind of process.) As in arvey, Trimbur, and van Dijk, 2007, ''Journal of Econometrics'' such flexible knowledge about the frequency of business cycles can actually be included in their mathematical study, using a Bayesian statistical paradigm. There are numerous sources of business ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Shock (economics)
In economics, a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it is an unpredictable change in exogenous factors—that is, factors unexplained by an economic model—which may influence endogenous economic variables. The response of economic variables, such as GDP and employment, at the time of the shock and at subsequent times, is measured by an impulse response function. Types of shocks A technology shock is the kind resulting from a technological development that affects productivity. If the shock is due to constrained supply, it is termed a supply shock and usually results in price increases for a particular product. Supply shocks can be produced when accidents or disasters occur. The 2008 Western Australian gas crisis resulting from a pipeline explosion at Varanus Island is one example. A demand shock is a sudden change of the pattern of private expenditure, especially of consumption spending by cons ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fixed Exchange Rate
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold. There are benefits and risks to using a fixed exchange rate system. A fixed exchange rate is typically used to stabilize the exchange rate of a currency by directly fixing its value in a predetermined ratio to a different, more stable, or more internationally prevalent currency (or currencies) to which the currency is pegged. In doing so, the exchange rate between the currency and its peg does not change based on market conditions, unlike in a floating (flexible) exchange regime. This makes trade and investments between the two currency areas easier and more predictable and is especially useful for small economies that borrow primarily in foreign currency and in which external trade forms a large part of the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Open-market Operation
In macroeconomics, an open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks. The central bank can either buy or sell government bonds (or other financial assets) in the open market (this is where the name was historically derived from) or, in what is now mostly the preferred solution, enter into a repo or secured lending transaction with a commercial bank: the central bank gives the money as a deposit for a defined period and synchronously takes an eligible asset as collateral. Central banks usually use OMO as the primary means of implementing monetary policy. The usual aim of open market operations is—aside from supplying commercial banks with liquidity and sometimes taking surplus liquidity from commercial banks—to manipulate the short-term interest rate and the supply of base money in an economy, and thus indirectly control the total money supply, in effect expanding money or cont ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monetary Policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate, to ensure price stability and general trust of the value and stability of the nation's currency. Monetary policy is a modification of the supply of money, i.e. "printing" more money, or decreasing the money supply by changing interest rates or removing excess reserves. This is in contrast to fiscal policy, which relies on taxation, government spending, and government borrowing as methods for a government to manage business cycle phenomena such as recessions. Further purposes of a monetary policy are usually to contribute to the stability of gross domestic product, to achieve and maintain low unemployment, and to maintain predictable exchange rates with other currencies. Monetary ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Arab States Of The Persian Gulf
The Arab states of the Persian Gulf refers to a group of Arab states which border the Persian Gulf. There are seven member states of the Arab League in the region: Bahrain, Kuwait, Iraq, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Yemen is bound to the six countries of the Gulf Cooperation Council, based on history and culture. The term has been used in different contexts to refer to a number of Arab states in the Persian Gulf region. The prominent regional political union Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Historically, various British Empire protectorates, including the Trucial States were Arab states along the Persian Gulf. Politics Some of the Arab states of the Persian Gulf are constitutional monarchies with elected parliaments. Bahrain ('' Majlis al Watani'') and Kuwait ('' Majlis al Ummah'') have legislatures with members elected by the population. The Sultanate of Oman also has an ad ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Smithsonian Agreement
The Smithsonian Agreement, announced in December 1971, created a new dollar standard, whereby the currencies of a number of industrialized states were pegged to the US dollar. These currencies were allowed to fluctuate by 2.25% against the dollar. The Smithsonian Agreement was created when the Group of Ten (G-10) states (Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States) raised the price of gold to 38 dollars, an 8.5% increase over the previous price at which the US government had promised to redeem dollars for gold. In effect, the changing gold price devalued the dollar by 7.9%. Background The Bretton Woods Conference of 1944 established an international fixed exchange rate system based on the gold standard, in which currencies were pegged to the United States dollar, itself convertible into gold at $35/ounce. A negative balance of payments, growing public debt incurred by the Vietnam War and Great Society pro ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bretton Woods System
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar). It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with balance of payments deficits. Preparing to rebuild the interna ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
