国际商务第十一章

1、International Business 9e By Charles W.L. HillMcGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 11The International Monetary System11-3What Is The International Monetary System?The international monetary system refers to the institutional arrangements th

2、at countries adopt to govern exchange ratesA floating exchange rate system exists when a country allows the foreign exchange market to determine the relative value of a currencythe U.S. dollar, the EU euro, the Japanese yen, and the British pound all float freely against each othertheir values are d

3、etermined by market forces and fluctuate day to day 11-4What Is The International Monetary System?A pegged exchange rate system exists when a country fixes the value of its currency relative to a reference currencymany Gulf states peg their currencies to the U.S. dollarA dirty float exists when a co

4、untry tries to hold the value of its currency within some range of a reference currency such as the U.S. dollarChina pegs the yuan to a basket of other currencies11-5What Is The International Monetary System?A fixed exchange rate system exists when countries fix their currencies against each other a

5、t some mutually agreed on exchange rateEuropean Monetary System (EMS) prior to 1999 11-6What Was The Gold Standard?The gold standard refers to a system in which countries peg currencies to gold and guarantee their convertibilitythe gold standard dates back to ancient times when gold coins were a med

6、ium of exchange, unit of account, and store of valuepayment for imports was made in gold or silver11-7What Was The Gold Standard?later, payment was made in paper currency which was linked to gold at a fixed rate in the 1880s, most nations followed the gold standard$1 = 23.22 grains of “fine” (pure)

7、goldthe gold par value refers to the amount of a currency needed to purchase one ounce of gold11-8Why Did The Gold Standard Make Sense?The great strength of the gold standard was that it contained a powerful mechanism for achieving balance-of-trade equilibrium by all countrieswhen the income a count

8、rys residents earn from its exports is equal to the money its residents pay for importsIt is this feature that continues to prompt calls to return to a gold standard 11-9Why Did The Gold Standard Make Sense?The gold standard worked well from the 1870s until 1914 but, many governments financed their

9、World War I expenditures by printing money and so, created inflationPeople lost confidence in the system demanded gold for their currency putting pressure on countries gold reserves, and forcing them to suspend gold convertibilityBy 1939, the gold standard was dead11-10What Was The Bretton Woods Sys

10、tem?In 1944, representatives from 44 countries met at Bretton Woods, New Hampshire, to design a new international monetary system that would facilitate postwar economic growth Under the new agreement a fixed exchange rate system was establishedall currencies were fixed to gold, but only the U.S. dol

11、lar was directly convertible to golddevaluations could not to be used for competitive purposesa country could not devalue its currency by more than 10% without IMF approval11-11What Institutions Were Established At Bretton Woods?The Bretton Woods agreement also established two multinational institut

12、ionsvThe International Monetary Fund (IMF) to maintain order in the international monetary system through a combination of discipline and flexibilityvThe World Bank to promote general economic development also called the International Bank for Reconstruction and Development (IBRD)11-12What Instituti

13、ons Were Established At Bretton Woods?vThe International Monetary Fund (IMF) fixed exchange rates stopped competitive devaluations and brought stability to the world trade environment fixed exchange rates imposed monetary discipline on countries, limiting price inflationin cases of fundamental diseq

14、uilibrium, devaluations were permitted the IMF lent foreign currencies to members during short periods of balance-of-payments deficit, when a rapid tightening of monetary or fiscal policy would hurt domestic employment11-13What Institutions Were Established At Bretton Woods?vThe World Bank Countries

15、 can borrow from the World Bank in two ways vUnder the IBRD scheme, money is raised through bond sales in the international capital market borrowers pay a market rate of interest - the banks cost of funds plus a margin for expenses. vThrough the International Development Agency, an arm of the bank c

16、reated in 1960 IDA loans go only to the poorest countries11-14Why Did The Fixed Exchange Rate System Collapse? Bretton Woods worked well until the late 1960s It collapsed when huge increases in welfare programs and the Vietnam War were financed by increasing the money supply and causing significant

17、inflation other countries increased the value of their currencies relative to the U.S. dollar in response to speculation the dollar would be devalued However, because the system relied on an economically well managed U.S., when the U.S. began to print money, run high trade deficits, and experience h

18、igh inflation, the system was strained to the breaking point the U.S. dollar came under speculative attack11-15What Was The Jamaica Agreement?A new exchange rate system was established in 1976 at a meeting in Jamaica The rules that were agreed on then are still in place todayUnder the Jamaican agree

19、mentfloating rates were declared acceptablegold was abandoned as a reserve assettotal annual IMF quotas - the amount member countries contribute to the IMF - were increased to $41 billion today they are about $300 billion 11-16What Has Happened To Exchange Rates Since 1973?Since 1973, exchange rates

20、 have been more volatile and less predictable than they were between 1945 and 1973 because ofthe 1971 and 1979 oil crisesthe loss of confidence in the dollar after U.S. inflation in 1977-78the rise in the dollar between 1980 and 1985the partial collapse of the EMS in 1992the 1997 Asian currency cris

21、isthe decline in the dollar from 2001 to 200911-17What Has Happened To Exchange Rates Since 1973?Major Currencies Dollar Index, 1973-201011-18Which Is Better Fixed Rates Or Floating Rates?Floating exchange rates providevMonetary policy autonomyremoving the obligation to maintain exchange rate parity

22、 restores monetary control to a governmentvAutomatic trade balance adjustments1.under Bretton Woods, if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy, the IMF would have to agree to a currency devaluation11-19Which Is Better Fixed Rate

23、s Or Floating Rates? But, a fixed exchange rate system v Provides monetary discipline ensures that governments do not expand their money supplies at inflationary ratesv Minimizes speculation causes uncertaintyv Reduces uncertainty1. promotes growth of international trade and investment11-20Who Is Ri

24、ght?There is no real agreement as to which system is better We know that a Bretton Woods-style fixed exchange rate regime will not workBut a different kind of fixed exchange rate system might be more enduringcould encourage stability that would facilitate more rapid growth in international trade and

25、 investment11-21What Type of Exchange Rate System Is In Practice Today?Various exchange rate regimes are followed today14% of IMF members follow a free float policy26% of IMF members follow a managed float system22% of IMF members have no legal tender of their ownex. Euro Zone countriesthe remaining

26、 countries use less flexible systems such as pegged arrangements, or adjustable pegs 11-22What Type of Exchange Rate System Is In Practice Today?Exchange Rate Policies of IMF Members11-23What Is A Pegged Rate System?A country following a pegged exchange rate system pegs the value of its currency to

27、that of another major currencypopular among the worlds smaller nations imposes monetary discipline and leads to low inflationadopting a pegged exchange rate regime can moderate inflationary pressures in a country11-24What Is A Currency Board?Countries using a currency board commit to converting thei

28、r domestic currency on demand into another currency at a fixed exchange ratethe currency board holds reserves of foreign currency equal at the fixed exchange rate to at least 100% of the domestic currency issued the currency board can issue additional domestic notes and coins only when there are for

29、eign exchange reserves to back them11-25What Is The Role Of The IMF Today? Today, the IMF focuses on lending money to countries in financial crisis There are three main types of financial crises:v Currency crisisv Banking crisisv Foreign debt crisis11-26What Is The Role Of The IMF Today?A currency c

30、risis occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency, or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates in order to defend prevailing exchange ratesBr

31、azil 200211-27What Is The Role Of The IMF Today?A banking crisis refers to a situation in which a loss of confidence in the banking system leads to a run on the banks, as individuals and companies withdraw their depositsA foreign debt crisis is a situation in which a country cannot service its forei

32、gn debt obligations, whether private sector or government debtGreece and Ireland 201011-28What Was The Mexican Currency Crisis Of 1995?The Mexican currency crisis of 1995 was a result ofhigh Mexican debtsa pegged exchange rate that did not allow for a natural adjustment of pricesTo keep Mexico from

33、defaulting on its debt, the IMF created a $50 billion aid package required tight monetary policy and cuts in public spending11-29What Was The Asian Currency Crisis?The 1997 Southeast Asian financial crisis was caused by events that took place in the previous decade includingvAn investment boom - fue

34、led by huge increases in exports vExcess capacity - investments were based on projections of future demand conditions vHigh debt - investments were supported by dollar-based debts1.Expanding imports caused current account deficits11-30What Was The Asian Currency Crisis?By mid-1997, several key Thai

35、financial institutions were on the verge of defaultspeculation against the bahtThailand abandoned the baht peg and allowed the currency to floatThe IMF provided a $17 billion bailout loan package required higher taxes, public spending cuts, privatization of state-owned businesses, and higher interes

36、t rates11-31What Was The Asian Currency Crisis?Speculation caused other Asian currencies including the Malaysian Ringgit, the Indonesian Rupaih and the Singapore Dollar to fallThese devaluations were mainly driven by excess investment and high borrowings, much of it in dollar denominated debta deter

37、iorating balance of payments position11-32What Was The Asian Currency Crisis?The IMF provided a $37 billion aid package for Indonesiarequired public spending cuts, closure of troubled banks, a balanced budget, and an end to crony capitalismThe IMF provided a $55 billion aid package to South Koreareq

38、uired a more open banking system and economy, and restraint by chaebol11-33How Has The IMF Done?By 2010, the IMF was committing loans to 68 countries in economic and currency crisisAll IMF loan packages require tight macroeconomic and monetary policy However, critics worrythe “one-size-fits-all” approach to macroeconomic policy is inappro