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

Case study on exceptions to the law of demand., can i get a case study on s...

can i get a case study on share market or any other company about their exceptions to the law of demand?

Molarity and normality, What is the Molarity and Normality of the ferrous a...

What is the Molarity and Normality of the ferrous ammonium salt ? For exam....196 gm (initial)

Differentiate between firm and industry, Differentiate between firm and ind...

Differentiate between firm and industry.   A firm is a business unit produced for the purpose of carrying out some kind of trading activity. The term "firm" is used in many ways

Consumption of services and goods, Services and goods that are used for the...

Services and goods that are used for their ultimate end purpose, meeting some human desire orneed. Consumption may include private consumption (by individuals, financed from their

Aggregate supply, Aggregate Supply When referred to in the circumstanc...

Aggregate Supply When referred to in the circumstance of GNP or GDP, aggregate supply refers to the labor and capital needs to proceeds the level of products and services need

#title.micro, what are jobs of the department of justice and the federal tr...

what are jobs of the department of justice and the federal trade commission in business pratices.

Supply and demand, Explain the meaning of the statment "coffee and tea are ...

Explain the meaning of the statment "coffee and tea are close substitutes".

Standard indifference curve analysis, Use standard indifference curve analy...

Use standard indifference curve analysis to demonstrate whether the following statement is true or false. If the objective of government welfare programs is to provide lower inc

What are the two main forms of economic distribution, What are the two main...

What are the two main forms of economic distribution? What is the difference between them?   The two major forms of economic distribution are exchange and transfer. Exchange in

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