Sense of world monetary system

Types of currency transactions

Sense and characteristics of foreign exchange market

Development of world monetary system

Sense of world monetary system

TOPIC 6. GLOBAL MONETARY SYSTEM

World monetary system is a form of international monetary relations, a set of rules and mechanisms by which the currency regulation and coordination of monetary policies of the world are carried out.

Primary elements of the world monetary system, which originally functioned independently, and then merged into a single body, are national monetary systems.

National monetary system is a form of economic relations of the country with which international payments, foreign exchange and use of state funds is made.

Place and role of the global monetary system in the modern global economy can be defined by stating its functions, which are the following:

• carrying out barter transactions and other types of international economic activity by making payments on exports and imports of goods, services and factors of production;

• providing mechanisms for establishing exchange rates between national currencies of different countries;

• ensuring the smooth functioning of the economic system and others.

Currency means a national monetary unit that forms the basis of the monetary system of a country (dollar, euro, pound, etc.). However, this concept is often used to refer to the type of monetary system in the country (gold, silver, bimetallic, paper) and foreign exchange (currency of foreign countries and payment instruments denominated in foreign currency units).

Currencies can be classified based on the following criteria: the degree of convertibility, the issuer of currency, material form, relation to the monetary reserves of the country and others.

Exchange rate realizes the exchange value of the national currency of one country expressed in the currency of other countries, and the coefficient of one currency to another, which is determined by supply and demand for it in the currency market. A variety factors that affect the level of the exchange rate (the rate of inflation, balance of payments, the difference in interest rates in different countries, the foreign exchange market and the volume of speculative currency transactions, the degree of use of a national currency in the European market and in international payments, acceleration or delay of international payments; degree of confidence in the currency at the national and international markets, monetary policy, etc.) reflect its relationship with other economic categories: value, price, money, interest, balance of payments and others.

Regarding exchange rate regimes, their purpose is to provide a definition of the exchange rate, its change, adjustment of payments between countries, servicing of foreign economic relations. In theory there are two exchange rate regimes: fixed and floating. In practice, these regimes are combined with a dominating of one of the "pure" exchange rate regime. There is another regime of exchange rates - direct state control of all international transactions.

Exchange parity is relatively stable and is determined by the ratio between the currencies of different countries or economic groups, which is established by the law. In the period of monometallism (golden or silver) the base of exchange rate was monetary parity as the ratio of currencies in different countries according to their metallic content. This content was pure gold or silver in the monetary unit and was legally fixed by the state.

Дата добавления: 2014-01-04