Exchange rate policy - imf, Microeconomics

Assignment Help:

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.


Related Discussions:- Exchange rate policy - imf

Market structure, how do oligopolistic market and monopolistic competition ...

how do oligopolistic market and monopolistic competition react to change in demand and supply ?

Pricing ATM Machines, A bank in a medium-sized midwestern city, Firm X, cur...

A bank in a medium-sized midwestern city, Firm X, currently charges $1 per transaction at its ATMs. To determine whether to raise price, the bank managers experimented with a numbe

Concept of diminishing returns, in aid of a diagram explain the concept of ...

in aid of a diagram explain the concept of diminishing returns in production

The standard indifference curve diagram, The Standard Indifference Curve Di...

The Standard Indifference Curve Diagram. The standard model of labour leisure choice does not distinguish between females and males. It is a unisex model. The vertical axis gives

Effects of weight loss, Effects of weight loss A healthy body is required n...

Effects of weight loss A healthy body is required not only for the sake of health, but also for maintaining the standard frame of a body. A person experiencing the problem of weigh

What is a statutory demand, The word length should be between 1200 to 1600 ...

The word length should be between 1200 to 1600 words. Please submit a hard copy with a coversheet to the lecturer at the commencement of class in Week 8. Find and read the Judgm

Gross national product, what is the formula for finding gross national prod...

what is the formula for finding gross national product?

Exit strategy, Exit Strategy The exit strategy denotes that which inves...

Exit Strategy The exit strategy denotes that which investors in an organizations realize all or elements of their investment, regardless of the organizations success.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd