Foreign economic activity. System of currency regulation of foreign trade activities (most important)

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Foreign economic activity. System of currency regulation of foreign trade activities (most important)

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33. System of currency regulation of foreign trade activities

The regulation of foreign trade with the help of monetary funds has a complex structure that combines a set of elements of the foreign exchange market, relations between exporters and importers with banks, systems of national and interstate foreign exchange regulation. In any state, the ratio of the elements used and the role of each of them differ depending on the state of foreign trade, the level of convertibility of the national currency, the principles of external payments and lending, the features of the national mechanism of state regulation as a whole, as well as the degree of involvement in the international monetary and financial sphere.

The purpose of currency regulation (short-term and medium-term) is to stimulate the economic activity of various subjects of foreign economic activity, the fight against inflation.

Elements of currency regulation:

▪ exchange rate - the ratio of the national currency (monetary unit) to the currency of another country. Its function is to ensure the proportionality of the exchange of currencies, the basis of which is their purchasing power in relation to goods within the country. The exchange rate depends on the convertibility of the national currency, that is, the ability to freely and unlimitedly exchange for other foreign currencies. convertibility can be full (free exchange for any foreign currency) or Partial, when the possibility of exchange is limited to certain types of currencies by international payment transactions. Full convertibility includes internal and external convertibility in its entirety.

Internal currency convertibility does not restrict the exchange of the national currency by legal entities and individuals of a given country in its domestic market.

External convertibility provides an opportunity to use the money earned in a given country by legal entities and individuals both in the domestic market and abroad.

Currency quotation - the establishment of foreign exchange rates in relation to the national one, carried out by state and large commercial banks by direct or indirect methods;

▪ devaluation - official depreciation of the national currency in order to equalize the external economic balance by increasing exports and reducing imports due to rising prices for imported products. Exporters have great advantages in the exchange of earned currency for the national one, in the growth of export production; at the same time, due to the rise in the cost of imports of goods, the volumes of secondary imports to the country are declining. As a result of devaluation, a stronger external depreciation of the national currency may occur compared to the internal one, which creates favorable conditions for the use currency dumping - speculative operations in the foreign market in order to make a profit by changing the exchange rate;

▪ revaluation - an increase in the official exchange rate of the national currency in relation to foreign ones and accompanied by a curtailment of the development of exports, its rise in price with a simultaneous reduction in the cost of imports;

▪ currency controlincluding: foreign exchange intervention (manipulation by the state bank of foreign exchange resources and interest rates), which is implemented in the form of targeted transactions for the purchase and sale of foreign currency by central banks in order to limit (increase, decrease, maintain) the national currency exchange rate; maneuvering bank interest rates, which affects the movement of liquid funds from one country to another, as well as contributing to changes in the exchange rate; currency restrictions, the purpose of which is to reduce external working capital.

Author: Bobkova O.V.

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