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Money. Credit. Banks. Concept, structure and elements of currency systems (lecture notes)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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Concept, structure and elements of currency systems

Monetary system - a form of organization of foreign exchange market relations at the national / international level.

Required items

Funds used as accounting / settlement and payment

Bodies exercising currency supervision (since 1945 IMF, in states usually the Central Bank)

Conditions and conversion mechanism

Exchange Rate Mode

Settlement rules

Mode of operation of the drug market. metals

Rules for receiving & using foreign exchange funds

The mechanism of currency restrictions

4 types of settlement means: currency, international money. units (non-cash only, SDR, very limited), units of account (ecu, for value comparison), gold.

The exchange rate is set in the market or officially.

Exchange rate functions:

▪ mutual exchange in trade

▪ price comparison

▪ revaluation of assets of banks/firms

BR - buy rate, OR - sell, difference - profit of banks, spread - relative difference. Spred = or-br / br * 100%

Currency quotation - the established exchange rate in the market

1 $ = 28 rubles, - direct rate

100 rubles = $3,16 - reverse

Cross rate 1 $ = 31,63 rubles 1 euro = 30, 99 rubles => 1 $ = 1,02 euros. Ruble - cross-currency

Spot rate - current rate

Forward rate - the rate taking into account that the transaction will be in the future

The nominal exchange rate is the same as the exchange rate.

Real exchange rate - nominal, taking into account changes in the price level in both countries

Exchange rate index = the sum of the exchange rates of many (different) countries * coefficient. (currency weight). There is also a nominal / real

The real exchange rate index is the main indicator of the dynamics of change

The IMF declares the unity of the rate, in practice, different rates for different purposes (to accelerate exports / imports, encourage outflows / inflows of capital)

Author: Shevchuk D.A.

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