Exchange rate policy - imf, Microeconomics

Exchange Rate Policy:

After the second amendment to the Articles of Agreement of IMF which came into effect on April 1, 1978, every member is free to choose its own exchange rate arrangements. After this amendment, SDR has become the international reserve asset and unit of account of the IMF. Some of the countries have pegged their currencies to SDR, some others to currencies of other countries. Many others have adopted any of the variants of the fixed exchange rate systems. 

The members are free to adopt any system. But the IMF is required to exercise surveillance over the exchange rate policies of members and is free to express its opinion on the policies of the member. Each member is required to see that its foreign exchange policies: 

•  endeavour to direct its economic  and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances; 

•  seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions; and 

•  avoid manipulation of exchange rates or the international monetary system in order to prevent effective BOP adjustment or to gain an unfair competitive advantage over the other members. 

In order to enable member-countries to frame their respective economic policies within the parameters defined above, the Fund provides them with "finance" to meet their BOP deficits and pursue adjustment programmes.

Posted Date: 11/15/2012 1:04:11 AM | Location : United States







Related Discussions:- Exchange rate policy - imf, Assignment Help, Ask Question on Exchange rate policy - imf, Get Answer, Expert's Help, Exchange rate policy - imf Discussions

Write discussion on Exchange rate policy - imf
Your posts are moderated
Related Questions
choose a topic from microeconomics that matters to you and find a recent news article covering that topic?

The Effect of Effluent Fees on the Firms' Input Choices *  Firms which have a by-product to production produce an effluent. *  An effluent fee is a per unit fee which firms

Situation is where a luxury is there. There is the snob appeal possibility where the higher the price, the more desired the commodity it.  Often people will drive expensive cars, e

A film studio in Hollywood produces movies according to the function q = F(K;L) = (2=100)K^0.5L^0.5 In the short run, capital (studios, gear) is xed at a level of 100. It costs $

explain main features of short run engineering cost theory

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

for the total product curve why is it when you reach at maximum adding more input leads to decline in output?

It is important to understand the important characteristics of monopolistic competition. The knowledge of these features will enable the students to know how this form of market st

What caused the productivity slowdown?  Observers have pointed to 4 factors--Oil prices, baby boom, increased problems of economic measurement and environmental protection expe

Explain the factors influencing the value of PED and yED. PED and YED should be explained and then dealt with in terms of determinants. PED is dependent on availability/closene