国际商务英语课文电子版lesson (17).doc

Lesson 17 The International Monetary System and Exchange RateThe earliest international monetary system was known as the gold standard under which countries pledged (promised) to change their paper currencies into gold when requested to do so. The gold standard created a fixed exchange rate system as each country pegged (fix挂钩) the value of its currency to gold to establish its par value (平价/票面价值) (face value). For most of the 19thcentury till the end of the First World War, major trading countries followed this system and the British Pound was the most important currency in international business as a result of the economic, political and military power of the United Kingdom, hence the term sterling-based gold standard. (pound sterling)The pressure caused by the First World War on economy coupled with (together with连同) the impact of the Great Depression (大萧条) put an end to(结束)the fixed exchange rate system. The Bank of England was no longer able to redeem (赎回，兑换) its paper currency for gold at par value (以面值) (无力将其纸币以平价兑换成黄金) and allowed its value to be determined by supply and demand (market). With Britain abandoning (放弃)the gold standard, there appeared different areas in the world. Some countries pegged their currencies to the sterling(英镑), some countries to the US dollar and some to the French Franc, forming the “sterling area”, “dollar area” and “franc area”. This period witnessed the degeneration(衰落)of the international monetary system as some major countries vied(vie - compete)to (竞相)devaluate their currencies to make their export goods more competitive.(竞争性贬值) (这一时期，世界货币体系不断恶化，各主要贸易国家竞相将其货币贬值以提高他们出口物品的竞争力) The benefits brought about by their devaluation were, needless to say (不用说), offset(抵消)by what their competitors did. International trade contracted (shrink收缩) and economic conflict finally led to the Second World War. Towards the end of the Second World War (1944) representatives of 44 countries gathered at Bretton Woods (布雷顿森林) to renew(更新)the gold standard on a greatly modified basis(在修改较大的基础上). One important fruit of the conference is the creation (establishment创立) of the International Bank for Reconstruction and Development (IBRD)and the International Monetary Fund. (1944)The Bretton Woods Conference established a US dollar based gold standard. Because of the dominating (主导性的) economic and political influence of the United States, the dollar replaced the sterling(英镑)as the major vehicle(工具)for international settlement(国际结算). 由于美国在国际经济、政治中的统治性影响，美元替代英镑成了国际结算中的主要工具。Though all the Bretton Woods participants(与会国)agreed to peg their currencies to gold, only the United States pledged to redeem the dollar for gold at the request of the central bank of a foreign country. Under the new fixed exchange rate system, each participant promised to maintain the par value(面值)of its currency(与黄金的兑换价), allowing a fluctuation of only one percent. The country concerned had to intervene(干预)if the market value (有别于账面价值的)市场价值，销售价格of its currency goes beyond the range(1%). Under special circumstances, a country was allowed to adjust the par value of its currency(与黄金的兑换价). Thus the Bretton Woods system is said to be using an adjustable peg (可调整的固定汇率). The new system was also called by some people the “New Gold Standard System.” This relative stability in exchange rates facilitated(promoted促进) international business till the beginning of 1970s.Under the Bretton Woods System, people would hold (持有) dollars so long as(如果)they trusted the convertibility(可兑换性)of the dollar into gold. With the increase of foreign dollar holdings to finance(provide fund for)trade expansion(为贸易增长提供资金), the faith of dollar holders decreased in the ability of the United States to redeem the dollar for gold. (为了给其贸易增长提供资金，外国人持有的美元越来越多。同时，他们对美国政府把美元兑换成黄金的信心却越来越低。)To reduce the demand for the dollar as a reserve currency(储备货币), the special drawing right(特别提款权)was created (设立). Used to settle official transactions(结算官方交易)at the IMF, SDRs are sometimes called paper gold(纸黄金). Despite the new liquidity(流动性) injected by SDRs into the international monetary system, United States was still unable to meet the demands of foreign dollar holders for gold(把美元兑换成黄金的需求). On August 15, 1971 the US Administration announced severing(sever: cut off)linkbetween the dollar and gold, signifying (标志着) the collapse of the Bretton Woods system. (marking the end to BWS)Since then, international business has relied increasingly on the flexible exchange rate system. Most major currencies (hard currencies)began to float (浮动) in the foreign exchange market. Other currencies followed a fixed exchange rate by pegging(钉住)themselves to a major currency such as the dollar, or the French Franc and float with it. From 1976 countries ceased to stipulate gold par value (金平价) to their paper currencies，leaving the price of their respective(各自的) currency to be decided by the interaction(相互作用)of supply and demand.Factors influencing the exchange rate include the following:1. International balance of payment (BOP) (国际收支).It has a direct bearing(influence)on the supply and demand of foreign exchange. The value of ones own currency will go up(货币升值)with favorable balance of payment (国际收支顺差) and drop with BOP deficit (国际收支逆差). BOP deficit unfavorable BOPBOP surplus favorable BOP2. Inflation. It is closely related to the real value of the currency and the competitiveness竞争力 of the commodity. When inflation intensifies(加剧), the value of the currency will drop(其货币价值相对于外币将会下降)(贬值)relative to foreign currencies and vice versa.3. Interest rate利率. Under specific conditions, high interest rate will attract short term international fund, increasing the exchange rate of ones own currency and vice versa. 2007.07 汉译英The above factors may work alone or collectively (together). Sometimes their influences may offset each other. Generally speaking, however, international balance of payment is the most important factor in deciding the trend of exchange rate. In addition, foreign exchange policies, political events and speculation activities (投机活动) may also have a role to play in the fluctuations of exchange rate.The flexible exchange rate system has never been clean float (清洁浮动)or free float(自由浮动). The central banks take various measures to intervene in the price of its currency. So the current practice is often called a managed float管理浮动 or dirty float(肮脏浮动). The common measures taken for intervention are: 1. foreign exchange reserves: When the price of a foreign exchange goes too high, the central bank may increase its supply by selling it out of its foreign exchange reserves. And in the opposite case, it can buy the currency in the market to increase its reserves.2. the discount rate: When the price of a foreign exchange goes too high, the government may raise the discount rate to absorb foreign fund to increase foreign exchange income/earnings of the country and vice versa.3. foreign exchange control: In case of acute剧烈的 exchange rate fluctuation波动, a government may have to resort to诉诸于；使用 foreign exchange control or raise foreign loans(collect筹集外来资金)to make up its balance of payment deficit(填补国际收支赤字)and lower the demand for foreign exchange.Foreign exchange income/earningForeign exchange reverse Foreign exchange controlForeign exchange shortageThe two different exchange rate systems each has its own advantages. The fixed exchange rate system reduces the riskiness of international business and is also an important measure to curb (抑制) inflation. 2009-04 汉译英However the system is vulnerable to (容易受到伤害easy to be affected by) disorderly changes (无序变化) in currency value. The most recent example is the Asian Financial Crisis of 19971998 when the fixed exchange rate adopted by some Southeast Asian countries like Thailand and Indonesia collapsed and dealt a heavy blow to 重创the economy. Under the flexible exchange rate system fluctuations of the exchange rate within a definite period of time will not immediately affect domestic money circulation 货币流通and is helpful to the stability of the economy. Flexible exchange rate can also protect domestic currency from the impact of foreign idle fund（闲置资金）（游资、热钱hot money)and helps to prevent the drain (流失) of foreign exchange reserve. But frequent wild swings (fluctuation)of the value of currencies will increase the riskiness of trade and affect international investment.Exchange rates are published daily in two different ways. A direct exchange rate is the price of a foreign currency in terms of （根据）the home currency(用本币表示外币的价格). In a direct quote, an amount of foreign currency, usually one unit or one hundred units is taken as the standard and the equivalent amount of home currency(等量本币)is marked after it. An indirect exchange rate is the price of home currency in terms of a foreign currency(用外币表示本币的价格). In an indirect quote one unit or one hundred units home currency is taken as the standard and the equivalent of foreign currency(等量外币)is given. For instance 100 USD/826.57RMB (or 826.57RMB/100USD) is direct exchange rate from the Chinese perspective and indirect exchange rate from the American