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exchange rate regime in countries in transition
Should this article be linked to the article Regímenes cambiarios? The articles are strucured very differently and have different coverage (the Spanish article is far more detailed), but both do discuss exchange rate regimes.
The reason why a country may want to switch to Fixed/Pegged Exchange Rate Policy are as follows: 1. Instability in its BOP 2. To reduce speculation in its economy 3. To facilitate or attract Foreign Direct Investment (FDI) through a stable and certain business enevironment 4. To address major Macro-economic problems such as Inflation (Reducing Imported Inflation), and Unemployment
As well, Floating Exchange Rate Policy is found to be viable to Economically Stable Countries such as the USA, RSA, and UK where their currency are able to compete on the Forex Market (Hard Currencies). Below may add to the advantages and reasons of switching to Floating Exchange Rate Policy:
a) It reflects the real performance of your economy with reference to other economies b) Through the 'Price Effect', the market forces will clear all the arbitrage possibilities thereby reaching to Equilibrium Exchange Rate and BOP (Nurtsse) c) Free Floating Policies reduces economic and Political ties between governments in trade d) It induces competion hence efficiency in the product markets and also raises the living standards of within an economy
NB: Remember each of the described policies above have also their disadvantages: (Solusi University: Jedzah)
where is managed floating? and who is the authority for the classification? Jackzhp (talk) 06:15, 12 March 2009 (UTC)[reply]
Why the hyphen? Rui ''Gabriel'' Correia (talk) 19:51, 6 June 2013 (UTC)[reply]
Dr. von Hagen has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
"An exchange-rate regime is the way an authority manages its currency in relation to other currencies and the foreign exchange market."
better: "in relation to other currencies on the foreign exchange market." (not "and")
"The basic types are a floating exchange rate, where the market dictates movements in the exchange rate;"
The market does not "dictate". Would be better to say that the central bank does not try to manipulate the exchange rate.
"a pegged float, where a central bank keeps the rate from deviating too far from a target band or value;"
Explain what the target band or value refers to.
"Floating rates are the most common exchange rate regime today."
False. Almost all currencies of developing and emerging market countries are pegged to one of the major currencies. Refer to the IMF Annual Reports on Exchange Rate Regimes, http://www.elibrary.imf.org/page/AREAER/www.imfareaer.org?redirect=true
"Dollarization occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency."
better: "Dollarization occurs when the inhabitants of a country spontaneously use the currency of another country as means of payments." This is different from situations where the government of a country legally adopts a foreign currency as means of payment. Dollarization is usually a reaction to a period of very high inflation.
Check the list of further readings for actual publications. For example the following paper has been published in the European Economic Review:
Levy Yeyati, Eduardo & Sturzenegger, Federico & Reggio, Iliana, 2010. "On the endogeneity of exchange rate regimes," European Economic Review, Elsevier, vol. 54(5), pages 659-677, July.
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
We believe Dr. von Hagen has expertise on the topic of this article, since he has published relevant scholarly research:
ExpertIdeasBot (talk) 21:00, 23 September 2016 (UTC)[reply]
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