Custom Search

Foreigen exchange


1.             Inflation

2.             Changes in demands for export import

3.             Invisible trade

4.             Interest rates

5.             Capital movements

6.             Speculation

7.             Government activities

8.             Confidence to future and speculation

Adv of float

1.             Automatic stabilisation

2.             Freeing internal(unempl) policy constr.

3.             Absence of crisis

4.             Management can still exist

5.             Flexibility(after oil price changes)

6.             Avoiding the import of inflation.

7.             Lower reserves


1.             Uncertainty

2.             Lack of investment

3.             Speculation

4.             Lack of discipline

PPP=Germans RPI/UK RPI. But basket is not IT, rate is influenced by govn, speculators, confidence is important

Portfolio balance-hot money allocates to greatest I

Interest rate parity-forwards

Dirty float-open market to stabilise

Weighted indices instead of dollar(effective rate)

1992.9UK left ERM, pound depr. 10%

Click here to see more economics,politics and school papers from me