international monetary system part 1

8/9/2019 international monetary system part 1

1/12

THETHE

INTERNATIONALINTERNATIONAL

MONETARY SYSTEMSMONETARY SYSTEMS


2/12

International Monetary Systems

are sets of internationally agreed rules, conventions and supportinginstitutions that facilitate international trade, cross borderinvestment and generally the reallocation of capital between nation

states. They provide means of payment acceptable between buyers andsellers of different nationality, including deferred payment. To operatesuccessfully, they need to inspire confidence, to provide sufficientliquidity for fluctuating levels of trade and to provide means by whichglobal imbalances can be corrected.

can grow organically as the collective result of numerous individualagreements between international economic actors spread overseveral decades. Alternatively, they can arise from a singlearchitectural vision as happened at Bretton Woods in 1944.


3/12

ROLE AND DRIVE FOR NEED

THE

INTERNATIONAL MONETARY SYSTEMS

Just as people in different countries speak different languages,they also transact business in different currencies, requiringconversion from one type of money to another.

The International Monetary System comprises the set of rulesand practices that govern how debts are honored and paidbetween and among nations with different national moneys.

When the system is functioning smoothly, all countries gain

from international flows of goods, services, and capital thesystem is an intl public good. But when it breaks down or ispoorly organized, nations are unable to sustain high levels oftrade and investment.


4/12

Balance of International

Payments

Refers to a countrys summary statement of

all imports of goods, services and capital items,paid for by the nation, as measured against the

value of all its exports of goods, services and

capital items.


5/12

Balance of International Payments' Principle

When the value of all foreign

receipts exceeds the value of allpayments to foreign countries, the

balance is said to be favorable.

When the payments abroadexceed the receipts, the balance

of payments is to be unfavorable to

the countr .


6/12

The Graham Commodity-Reserve-Currency

Proposal

Increasing the official price of gold for

international monetary reserves

The Keynes Plan for an International CentralBank

The International Monetary Fund

Proposals for International Monetary ReformsProposals for International Monetary Reforms


7/12

THE

INTERNATIONAL MONETARY

FUND


8/12

an organization of 187 countries, working to foster global

monetary cooperation, secure financial stability, facilitate

international trade, promote high employment and

sustainable economic growth, and reduce poverty around

the world. www.imf.org set up in 1944 to lower trade barriers between countries and to

stabilize currencies by monitoring the foreign exchange systems of

member countries, and lending money to developing nations.


9/12

The IMF supports its membership by providing:

policy advice to governments and central banks based on

analysis of economic trends and cross-country experiences;

research, statistics, forecasts, and analysis based on tracking ofglobal, regional, and individual economies and markets;

loans to help countries overcome economic difficulties;

concessional loans to help fight poverty in developing countries;and

technical assistance and training to help countries improve the

management of their economies.

IMF Key ActivitiesIMF Key Activities


10/12

provide a forum for cooperation on international monetary

problems

facilitate the growth of international trade, thus promotingjob creation, economic growth, and poverty reduction;

promote exchange rate stability and an open system of

international payments; and

lend countries foreign exchange when needed, on a

temporary basis and under adequate safeguards, to help

them address balance of payments problems.

IMF AIMSIMF AIMS


11/12

The Reduced Role of Gold under the Second Amendment to the ArticlesThe Reduced Role of Gold under the Second Amendment to the Articles

of Agreement of the International Monetary Fundof Agreement of the International Monetary Fund

Gold is removed from the central position it occupies

in the Funds present Articles by:

Breaking the link b/w gold & SDR;

Prohibiting the use of gold as a peg for a currency

under any future exchange arrangements, including par

value system;

By requiring the Fund in any dealings in gold, to avoid

actions that would manage the price in the market or

establish a fixed price.


12/12

ENDOF

END

OF

PARTPART

ONEONE

international monetary system part 1

Documents

Transcript of international monetary system part 1