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
Special Drawing Rights: The late 1960s witnessed that the growth in world resources did not keep pace with the growth in international trade. The slackness in the growth of re

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

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

Write Equations Of Average Total Cost Variable Cost Marginal Cost, Economics Write equations for total cost, average total cost, variable cost, and marginal cost. The Central Pub

Optimum currency area: An optimum currency area (OCA), also known as an optimal currency region (OCR), is a geographical region in which it would maximize economic efficiency

In this assignment you will apply consumer choice theory and marginal analysis to business problems. Consider each of the following products and services: a pair of tickets to a s

discuss the methods used by the malaysian government to slow down import growth.

Fiscal Imbalance: The persistent rise in resource gap has led to a growing volume of public debt. The central feature that emerges is a serious fiscal imbalance, arising from

Determinants of Social Demand - Economies of Scale The universe of knowledge is highly diverse. There are certain branches of knowledge whose value to human culture and civil

show this in a pie chart age = under 20|number of people = 20.90