国际金融托马斯A普格尔ppt.pptVIP

If we replace real exchange rate (RER) with nominal exchange rate in the calculation of nominal effective exchange rate (NEER), we have our third measure of change in exchange rate, namely real effective exchange rate (REER). * Floating exchange rates Downward-sloping demand curve Equilibrium exchange rate Shift in demand and supply curves Fixed exchange rates Par value and the narrow band Supply and demand gap Government intervention * What makes the demand curve slope downward? Fixed the price $1.98/￡ The British government must buy (320-270)million pounds, equal to the gap AB Fixed the price $0.505/SFr The Swiss government must sell (575-475)billion Swiss francs What makes the floating exchange rate rise or fall over time? For the U.K. Exportation (to U.S.A) Capital inflow (into the U.K.) For the U.S.A Importation (from the U.K.) Capital Outflow (from the U.S.A.) Fixed exchange rate system 2.02 0.495 ----In the case of Figure on the left: most likely to buy pounds----In the case of Figure on the right: most likely to sell SFr British par value=$2, upper limit=$2.02, lower limit=$1.98 Swiss franc par value=$0.5, upper limit=$0.505, lower limit=$0.495 Implications of exchange rate change under different systems Under fixed exchange rate system, an intervention affects the economy through changes in money supply Under floating exchange rate system, or managed floating system, a change in the exchange rate tends to change the quantities and types of merchandise that are produced and consumed. Useful Linkage Some Practical Information about Foreign Exchange Investment: 华尔街日报―汇市分析 /gb/frx.asp Foreign exchange rate data Historical series – International Financial Statistics (IMF) Current rates: /rates-charts/tradable-rates/ * * What is foreign exchange? Dynamic concept(trading different nations’ moneys) Static concept(foreign currencies) Demand and supply for foreign exchange Current account: e.g. pay for import of goods Financial account