The document discusses maintaining a fixed exchange rate through central bank cooperation or noncooperation. With cooperation, central banks lower interest rates to boost output in both countries. Noncooperation sees more aggressive devaluations that improve one country's output at the expense of the other. It also examines how central banks defend exchange rate pegs by adjusting foreign reserves in response to money demand shocks from changes in output or foreign interest rates. Defending the peg involves selling reserves if money demand falls to prevent currency depreciation.
Emerging market carry trade mini case, international finance course, Why so many investors are shorting dollars and eur?
why interest rates are so low in core markets of euro and dollar?
Emerging market carry trade mini case, international finance course, Why so many investors are shorting dollars and eur?
why interest rates are so low in core markets of euro and dollar?
An interesting, thorough, detailed and conspicuous presentation regarding "Exchange Rates": relevant terminology and explanatory diagrams are included.
A country's forex exchange rate provides a window to its economic stability, which is why it is constantly watched and analyzed. If you are thinking of sending or receiving money from overseas, you need to keep a keen eye on the currency exchange rates.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
2. In panel (a), the noncenter home country is initially in equilibrium at point 1 with output at Y1, which is lower than desired output Y0. In panel
(b), the center foreign country is in equilibrium at its desired output level Y*0 at point 1′. Home and Foreign interest rates are equal, i1 = i*1, and
Home is unilaterally pegged to Foreign. Foreign has monetary policy autonomy. If the center country makes no policy concession, this is the
noncooperative outcome. 2
3. With cooperation, the foreign country can make a policy concession and lower its interest rate and home can do the same and maintain the peg.
Lower interest rates in the other country shift each country’s IS curve in, but the easing of monetary policy in both countries shifts each
country’s LM curve down. The net effect is to boost output in both countries.
.
3
4. The new equilibria at points 2 and 2′ lie to the right of points 1 and 1′. Under this cooperative outcome, the foreign center country accepts a rise
in output away from its desired level, from Y*0 to Y*2. Meanwhile, Home output gets closer to its desired level, rising from Y1 to Y2.
4
5. Cooperative and Noncooperative Adjustments to Exchange Rates
• Suppose a country that was previously pegging at a rate ത𝐸1
announces that it will henceforth peg at a different rate, ത𝐸2 ≠ ത𝐸1.
• By definition, if ത𝐸2 > ത𝐸1, there is a devaluation of the home
currency; if ത𝐸2 < ത𝐸1, there is a revaluation of the home
currency.
• We assume that the center (the United States) is a large country
with monetary policy autonomy that has set its interest rate at i$.
• Home is pegged to the U.S. dollar at ത𝐸home/$ and Foreign is
pegged at ത𝐸*
foreign/$.
5
6. In panel (a), the noncenter home country is initially in equilibrium at point 1 with output at Y1, which is lower than desired output Y0. In panel
(b), the noncenter foreign country is in equilibrium at its desired output level Y*0 at point 1′. Home and Foreign interest rates are equal to the
base (dollar) interest rate and to each other, i1 = i*1 = i*$, and Home and Foreign are unilaterally pegged to the base. 6
7. With cooperation, Home devalues slightly against the dollar (and against foreign) and maintains a peg at a higher exchange rate. The Home
interest and Foreign interest rates remain the same. But the Home real depreciation causes Home demand to increase: IS shifts out to IS2. This is
also a Foreign real appreciation, so Foreign demand decreases: IS* shifts in to IS*2. 7
8. Under this cooperative outcome at points 2 and 2′, foreign accepts a fall in output away from its desired level, from Y*0 to Y*2. Meanwhile,
Home output gets closer to its desired level, rising from Y1 to Y2.
8
9. With noncooperation, Home devalues more aggressively against the dollar. After a large Home real depreciation, IS shifts out to IS3 and IS*
shifts in to IS*3. Under this noncooperative outcome at points 3 and 3′, Home gets its desired output Y0 by “exporting” the recession to foreign,
where output falls all the way to Y*3. 9
10. Cooperative and Noncooperative Adjustments to Exchange Rates
• We can now see that adjusting the peg is a policy that may be
cooperative or noncooperative in nature.
• If noncooperative, it is usually referred to as a beggar-thy-
neighbor policy: home can improve its position at the expense
of foreign and without foreign’s agreement.
• If home engages in such a policy, it is possible for foreign to
respond with a devaluation of its own in a tit-for-tat way.
• Cooperation may be most needed to sustain a fixed exchange
rate system with adjustable pegs, so as to restrain beggar-thy-
neighbor devaluations.
10
11. • One common argument in favor of fixed exchange rate
regimes in developing countries is that an exchange rate peg
prevents the government from printing money to finance
government expenditure.
• Under such a scheme, the central bank is called upon to
monetize the government’s deficit (i.e., give money to the
government in exchange for debt). This process increases the
money supply and leads to high inflation.
• The source of the government’s revenue is an inflation tax
(called seigniorage) levied on the members of the public who
hold money.
Fiscal Discipline, Seigniorage, and Inflation
11
12. The Inflation Tax
• At any instant, money grows at a rate ΔM/M = ΔP/P = π.
• If a household holds M/P in real money balances, then a
moment later when prices have increased by π, a fraction π of
the real value of the original M/P is lost to inflation. The cost
of the inflation tax to the household is π × M/P.
• The amount that the inflation tax transfers from household to
the government is called seigniorage, which can be written as:
12
13. Fiscal Discipline, Seigniorage, and Inflation
• If a country’s currency floats, its central bank can print a lot
or a little money, with very different inflation outcomes.
• If a country’s currency is pegged, the central bank might run
the peg well, with fairly stable prices, or run the peg so badly
that a crisis occurs, the exchange rate ends up in free fall, and
inflation erupts.
• Nominal anchors—whether money targets, exchange rate
targets, or inflation targets—imply a “promise” by the
government to ensure certain monetary policy outcomes in
the long run.
• However, these promises do not guarantee that the country
will achieve these outcomes.
13
14. Inflation Performance and the Exchange Rate Regime
Cross-country annual data from the period 1970 to 1999 can be used to explore the relationship, if any, between the exchange rate
regime and the inflation performance of an economy. Floating is associated with slightly lower inflation in the world as a whole (9.9%)
and in the advanced countries (3.5%) (columns 1 and 2). In emerging markets and developing countries, a fixed regime eventually
delivers lower inflation outcomes, but not right away (columns 3 and 4).
14
15. Liability Dollarization, National Wealth, and Contractionary Depreciations
• The Home country’s total external wealth is the sum total of
assets minus liabilities expressed in local currency:
• A small change ΔE in the exchange rate, all else equal, affects
the values of EAF and ELF expressed in local currency. We can
express the resulting change in national wealth as:
15
16. Destabilizing Wealth Shocks
• It is easy to imagine more complex short-run models of the
economy in which wealth affects the demand for goods. For
example,
o Consumers might spend more when they have more wealth.
In this case, the consumption function would become
C(Y − T, Total wealth).
o Firms might find it easier to borrow if their wealth increases.
The investment function would then become
I(i, Total wealth).
16
17. Destabilizing Wealth Shocks
• If foreign currency external assets do not equal foreign
currency external liabilities, the country is said to have a
currency mismatch, and exchange rate changes will affect
national wealth.
o If foreign currency assets exceed foreign currency
liabilities, the country experiences an increase in wealth
when the exchange rate depreciates.
o If foreign currency liabilities exceed foreign currency
assets, the country experiences a decrease in wealth when
the exchange rate depreciates.
• In principle, if the valuation effects are large enough, the
overall effect of a depreciation can be contractionary!
17
18. Exchange Rate Depreciations
and Changes in Wealth
The countries experienced
crises and large depreciations of
between 50% and 75% against
the U.S. dollar and other major
currencies from 1993 to 2003.
Because large fractions of their
external debt were denominated
in foreign currencies, all
suffered negative valuation
effects causing their external
wealth to fall, in some cases
(such as Indonesia) quite
dramatically.
18
19. Original Sin
• In the long history of international investment, one constant
feature has been the inability of most countries—especially
poor countries—to borrow from abroad in their own
currencies.
• The term original sin refers to a country’s inability to borrow in
its own currency.
• Domestic currency debts were frequently diluted in real value
by periods of high inflation. Creditors were then unwilling to
hold such debt, obstructing the development of a domestic
currency bond market. Creditors were then willing to lend only
in foreign currency, that is, to hold debt that promised a more
stable long-term value.
19
20. Measures of “Original Sin”
Only a few developed countries can issue external liabilities denominated in their own currency. In the financial centers and the
Eurozone, the fraction of external liabilities denominated in foreign currency is less than 10%. In the remaining developed countries,
it averages about 70%. In developing countries, external liabilities denominated in foreign currency are close to 100% on average.
20
21. • Let’s assume home currency is the peso. The currency to
which home pegs is the U.S. dollar, and we assume the
authorities have been maintaining a fixed exchange rate,
with E fixed at ത𝐸 = 1 (one peso per U.S. dollar).
• The country’s central bank controls the money supply M by
buying and selling assets in exchange for cash. The central
bank trades domestic bonds (denominated in pesos), and
foreign assets (denominated in dollars).
• The central bank stands ready to buy and sell foreign
exchange reserves at the fixed exchange. If it has no
reserves, it cannot do this and the exchange rate is free to
float: the peg is broken.
How pegs actually work
21
22. • For now, we assume that the peg is credible. Uncovered interest parity then implies
that the home and foreign interest rates are equal: i = i*.
• We will also assume for now that output or income is exogenous and denoted Y.
• There is a stable foreign price level P* = 1 at all times. In the short run, the home
country’s price is sticky and fixed at a level P = 1. In the long run, if the exchange rate
is kept fixed at 1, then the home price level will be fixed at 1 as a result of purchasing
power parity.
• The home country’s demand for real money balances M/P is determined by the level
of output Y and the nominal interest rate i and takes the usual form, M/P = L(i)Y. The
money market is in equilibrium.
22
23. • The home central bank’s sole liability is the money in
circulation.
• Suppose the central bank has purchased a quantity B pesos of
domestic bonds. By, in effect, loaning money to the domestic
economy, the central bank’s purchases are usually referred to
as domestic credit created by the central bank.
• These purchases generate part of the money supply and are
also called the bank’s domestic assets.
• The part of the home money supply created as a result of the
central bank’s issuing of domestic credit is denoted B.
The Central Bank Balance Sheet
23
24. • Now suppose the central bank also uses money to purchase a
quantity R dollars of foreign exchange reserves, usually
referred to as reserves.
• Because the central bank holds only two types of assets, the
last two expressions add up to the total money supply in the
home economy:
The Central Bank Balance Sheet
• Expressed not in levels but in changes:
24
25. The central bank balance sheet contains the central bank’s
assets, B + R, and the money supply, its liabilities.
The exchange rate is fixed if and only if the central bank holds
reserves; and the exchange rate is floating if and only if the
central bank has no reserves.
Fixing, Floating, and the Role of Reserves
25
26. How Reserves Adjust to Maintain the Peg
• What level of reserves must the central bank have to
maintain the peg? If the central bank can maintain a level of
reserves above zero, we know the peg will hold. If not, the
peg breaks. Solving for the level of reserves:
• Since money supply equals money demand, given by
M = ത𝑃L(i)Y, then:
26
R = M -B
27. On the 45-degree line, reserves are at zero, and the money supply M equals domestic credit B. Variations in the money supply along
this line would cause the exchange rate to float. There is a unique level of the money supply M1 (here assumed to be 1,000) that
ensures the exchange rate is at its chosen fixed value.
27
28. To fix the money supply at this level, the central bank must choose a mix of assets on its balance sheet that corresponds to points on
line XZ, points at which domestic credit B is less than money supply M. At point Z, reserves would be at zero; at point X, reserves
would be 100% of the money supply. Any point in between on XZ is a feasible choice. At point 1, for example, domestic credit is B1 =
500, reserves are R1 = 500, and B1 + R1 = M1 = 1,000. 28
29. A fixed exchange rate that always operates with reserves
equal to 100% of the money supply is known as a currency
board system.
To sum up: if the exchange rate is floating, the central bank
balance sheet must correspond to points on the 45-degree
floating line; if the exchange rate is fixed, the central bank
balance sheet must correspond to points on the vertical fixed
line.
29
30. Defending the Peg
A Shock to Home Output or the Foreign Interest Rate
• Suppose output falls or the foreign interest rate rises. We treat
either of these events as an exogenous shock, all else equal
• Suppose the exogenous shock decreases money demand by 10%
at the current interest rate.
• A fall in the demand for money would lower the interest rate in
the money market and put depreciation pressure on the home
currency. To maintain the peg, the central bank must keep the
interest rate unchanged. It must sell 100 million pesos ($100
million) of reserves, in exchange for cash.
30
32. If money demand falls, interest rates tend to fall, leading to pressure for an exchange rate to depreciate. To prevent this, the central bank must
intervene and defend the peg by selling reserves. This lowers the money supply. The bank’s objective is to keep the interest rate fixed and to
ensure that money supply equals money demand. As shown here, the money supply declines from M1 = 1,000 to M2 = 900.
32
33. If domestic credit is unchanged at B1 = 500, the change in the central bank balance sheet is shown by a move from point 1 to point 2, and
reserves absorb the money demand shock by falling from R1 = 500 to R2 = 400.
33
34. An opposite positive shock is shown by the move from point 1 to point 3, where M3 = 1,100 and R3 = 600. In a currency board system, a country
maintaining 100% reserves will be on the horizontal axis with zero domestic credit, B = 0. A currency board adjusts to money demand shocks by
moving from point 1′ to points 2′ or 3′.
34