Regimes of exchange rates
The market is facing lot of problems this time. The main problem is international monitory fund and free market advocates, the fixed exchange rate regimes are officially in the vogue. China is having the store of the foreign exchange reserves, it is removes the possibility of estimated attacks. The currencies that are affected by the US dollar are Hong Kong dollar and china Yuan. These both the countries have witnessed the loss of the currency every day about 5% or more per day. The investors borrowing back their money from these countries at a rapid clip.
In the Dubai the (IMF) International Monetary Fund, will control inflation and the real shocks to the exchange rates. It is also given in the report that 2010 would be the year for making the institutional infrastructure for the currency union. The report of IMF also said that the very bad affect of the swings have affected major currency. The intermediate exchange rates regime provides the basket peg for major currency. Basket peg is very difficult to understand and less secure than a single currency peg. You can see the example of Kuwait. The situation might come in the control and gain the US dollar will gets its strength. The six states combine make the union in 2010.
Foreign exchange is not changing its value from some time. The US currency is gaining the market currency against the commodity sensitive currency. Chinese currency has no changes as midyear. Sterling is only currency having the extraordinary change. It is showing the net gains of 0.75-1.0% of 16:00 GMT against dollar. Euro is also in the race against the dollar having the 6% in this November on 14. The financial and economic status of the countries becomes as similar in the passed few weeks. The equities become down and the rates of gold and oil are continuously dropping. The recession has taken all the countries in its palm. The counties most bad position is has yet come just like when first time after world war II had fought. The low interest rates have created the countries difficult credit condition, deflating houses, rising employment and loss of wealth and income. This is the condition cant says when it will reduce and when it will completely removed from the market and countries. The recession and inflation has trapped the USA country and the countries like Europe, candor, Japan, are not that much affected by the market recession. The US is having the new federal power and the public is expecting more from the government which will release them from this problem very soon.
The equities have come down very instantly in the United States as well as Europe. After seeing the statistical report they are tumbled to 20% in very short time. The Asian market is not far from the tumble. Nikkei also in lost. Japanese entry to reduce the yen appreciation is a risk. All the economic prospects of Japan have made the financial global turbulence. The short term rates of interest are less than 0.5%. After the recent study it is determined that Britain is not in the recession. Bank of England cutting the interest from their account holders. Pound day by day falling and the dollar rose progressively. The G-7 leaders will introduce the shares foreign exchange policy this year. It will help to stabilize the financial and economic crisis.
China stands at the top of the food chain planned economy. China is having the immense power by which they can easily handle the recession problem that every country is facing currently. It is having 15% of GDP in the two years so it can easily liable to solve these problems. So by seeing all these statistical data all have to wait to get for the world to cope up the problem of recession and inflation.
Written by: Natali Ya