The document discusses the key roles and challenges of central banks. Central banks monitor economic indicators like the balance of trade, balance of payments, inflation, and exchange rates. They provide guidelines to influence these factors. Maintaining stability and balancing accounts are primary obligations. Key challenges for central banks include achieving economic growth, reducing poverty and unemployment, managing inflation, maintaining stable exchange rates, ensuring financial stability, and operating independently from government pressure.
this chapter we are going to explain key, components of the BoP, and explain how the international flow of funds is influenced by economic factors and other factors
The Relation between Balance of Payment and Foreign Exchange Ratemohamedosman370
The Definition of the (BOP)
The (BOP) structure
The Surplus and Deficit of (BOP)
Purposes of Official Reserve
The nominal and real exchange rate
The exchange rate regimes
Role of Monetary Policy and Central Banking in Combating Inflation Andishga...Amir Fassihi
Andishkadeh of Economics
Saeed Abtahi, DBA
Sunday October 13th, 2013 (4pm-7pm)
UCLA (Neuroscience Research Building)
635 Charles E Young Dr
Andishgah Lecture Series
The Role of Central Bank and Monetary Policy in Iran
The Iranian economy is in dire shape, with inflation running rampant as a direct consequence of the previous administration’s flawed economic policies. It is generally accepted that taming inflation requires a strong, transparent, independent and accountable central bank that has at its disposal the appropriate financial instruments to transmit monetary policy.
This presentation will:
v Address the current practices of monetary policy and central banking in Iran; and
v Provide a number of recommendations that Iranian authorities should consider to prevent Iran’s economy from edging toward disastrous hyperinflation.
Saeed Abtahi, DBA is an international investment banker, with 33 years of working experience in Europe, U.S., and the Middle East advising multi-national corporations, banks, government agencies and sovereign wealth funds in capital markets, corporate finance, asset management and strategic advisory works.
He is a resident of Los Angeles and consults his clients in California, Kuwait, and Abu Dhabi.
Saeed Abtahi earned his B.S. in Electrical Engineering and M.S. in Operation Research from Massachusetts Institute of Technology, and DBA in Finance from Harvard Business School.
this chapter we are going to explain key, components of the BoP, and explain how the international flow of funds is influenced by economic factors and other factors
The Relation between Balance of Payment and Foreign Exchange Ratemohamedosman370
The Definition of the (BOP)
The (BOP) structure
The Surplus and Deficit of (BOP)
Purposes of Official Reserve
The nominal and real exchange rate
The exchange rate regimes
Role of Monetary Policy and Central Banking in Combating Inflation Andishga...Amir Fassihi
Andishkadeh of Economics
Saeed Abtahi, DBA
Sunday October 13th, 2013 (4pm-7pm)
UCLA (Neuroscience Research Building)
635 Charles E Young Dr
Andishgah Lecture Series
The Role of Central Bank and Monetary Policy in Iran
The Iranian economy is in dire shape, with inflation running rampant as a direct consequence of the previous administration’s flawed economic policies. It is generally accepted that taming inflation requires a strong, transparent, independent and accountable central bank that has at its disposal the appropriate financial instruments to transmit monetary policy.
This presentation will:
v Address the current practices of monetary policy and central banking in Iran; and
v Provide a number of recommendations that Iranian authorities should consider to prevent Iran’s economy from edging toward disastrous hyperinflation.
Saeed Abtahi, DBA is an international investment banker, with 33 years of working experience in Europe, U.S., and the Middle East advising multi-national corporations, banks, government agencies and sovereign wealth funds in capital markets, corporate finance, asset management and strategic advisory works.
He is a resident of Los Angeles and consults his clients in California, Kuwait, and Abu Dhabi.
Saeed Abtahi earned his B.S. in Electrical Engineering and M.S. in Operation Research from Massachusetts Institute of Technology, and DBA in Finance from Harvard Business School.
Comparison beween Multinational Financial Management and Domestic Financial Management?
Discuss evolution and International Financial Management System?
Write Special features of foreign exchange?
Describe the country risk Analysis in International Business?
Short notes on:
(i) Franchise system
(ii) Short term assets and liabilities
(iii) Foreign direct investment
A fantastic PPT on balance of payments. The PPT includes a complete of the meaning and various concepts of balance of payments. It also discusses about the type of transactions recorded in BOP and various types of accounts.
Comparison beween Multinational Financial Management and Domestic Financial Management?
Discuss evolution and International Financial Management System?
Write Special features of foreign exchange?
Describe the country risk Analysis in International Business?
Short notes on:
(i) Franchise system
(ii) Short term assets and liabilities
(iii) Foreign direct investment
A fantastic PPT on balance of payments. The PPT includes a complete of the meaning and various concepts of balance of payments. It also discusses about the type of transactions recorded in BOP and various types of accounts.
3. Balance of Trade
• The balance of trade is the
difference between the monetary
value of exports and imports in an
economy over a certain period of
time.
4. Balance of Trade
• A positive balance of trade is
known as a trade surplus and
consists of exporting more than is
imported;
• a negative balance of trade is
known as a trade deficit or,
informally, a trade gap.
5. Govt. Intervention
In order to fill the trade gap government
intervenes:
• Artificial shortage created by local traders
(hoarding),
• Prices of commodities are high,
• Govt. intervenes by importing same
commodity at lower price,
• Then local trades sell their hoarded
material.
6. Physical balance of trade
• Monetary balance of trade is
different from physical balance of
trade (which is expressed in
amount of raw materials).
Developed countries usually
import a lot of primary raw
materials from developing
countries at low prices.
7. • Often, these materials are then
converted into finished products,
and a significant amount of value
is added
8. 1. Exchange rates
2. Trade agreements or barriers
3. Other tax, tariff and trade
measures
4. Business cycle at home or
abroad.
Factors that can affect BOT
9. Balance of Payment
• The balance of payments, (or BOP)
measures the payments that flow
between any individual country and all
other countries. It is used to summarize
all international economic transactions
for that country during a specific time
period, usually a year.
10. • The BOP is determined by the
country's exports and imports of
goods, services, and financial
capital, as well as financial
transfers. It reflects all payments
and liabilities to foreigners (debits)
and all payments and obligations
received from foreigners (credits).
11. • Balance of payment
• Balance of trade
both of these must be balanced & to
keep them balanced is primary obligation
of Central bank.
12. Current Account
• The current account is the sum of
net sales from trade in goods and
services, net factor income (such
as interest payments from
abroad), and net unilateral
transfers from abroad.
13. • Positive net sales to abroad
corresponds to a current
account surplus; negative net
sales to abroad corresponds to a
current account deficit.
14. Capital account (or financial account)
• The financial account is the net
change in foreign ownership of
domestic assets. If foreign ownership
of domestic assets has increased
more quickly than domestic ownership
of foreign assets in a given year, then
the domestic country has a financial
account surplus.
15. Balance of Payments Equilibrium
is defined as a condition where the
sum of debits and credits from the
Current Account and the Financial
Account equal zero;
Current Account + Financial Account = 0
17. Challenges of a Central Bank
1. Economic Growth
Economic growth is the increase in
value of the goods and services
produced by an economy. It is
conventionally measured as the
percent rate of increase in real
gross domestic product, or GDP.
18. 2. Poverty Reduction
In politics, the fight against
poverty is usually regarded as a
social goal and many
governments have — secondarily
at least — some dedicated
institutions or departments.
19. 3. Unemployment
• Unemployment is the condition
of willing workers lacking jobs or
"gainful employment". In
economics, unemployment
statistics measure the condition
and extent of joblessness within
an economy.
20. 4. Inflation
• Inflation is the persistent rise in
the general price level as
measured against a standard
level of purchasing power. There
are many varying measures of
inflation in use because different
prices affect different people.
21. Stability in Forex Rate
• Central banks play an important
role in the foreign exchange
markets. They try to control the
money supply, inflation, interest
rates and often have official or
unofficial target rates for their
currencies.
22. Public Policy And Financial Stability
• It seems useful at the outset to define
financial stability and to do so by
defining its opposite, financial
instability. The most useful concept of
financial instability for central banks
and other authorities involves some
notion of market failure or externalities
that can potentially impinge on real
economic activity.
23. • With this definition of financial
instability, a clear public policy
interest arises for central banks and
other authorities to act in two distinct
roles in pursuing financial stability—
prevention of instability and
management of the consequences
once markets become unstable.
24. Independence of Central Banks
• In this context, independence is
usually defined as the central
bank’s operational and
management independence from
the government.
25. Independence of Central Banks
• World Bank, the BIS and the IMF are
strong supporters of central bank
independence. Governments generally
have some degree of influence over
even "independent" central banks; the
aim of independence is primarily to
prevent short-term interference.
26. • For example, the chairman of the
U.S. Federal Reserve Bank is
appointed by the President of the
U.S., and his choice must be
confirmed by the Congress.