Professional Documents
Culture Documents
Group members Bawa Suneja Neha Chhabra Rajpal Singh Shruti bansal
The history of monetary system started when in ancient time (17th century B.C.) tribes & citystates of India, Babylon & Phoenicia used gold and silver as medium of exchange in trade.
For e.g. U.K. buys or sell 1 ounce of gold for 4.247 pounds sterling (establishing official value of pound sterling in terms of gold) & Unites states agreed to buy or sell an ounce of gold to a par value of $ 20.67 pound sterling 4.247 = 1 ounce of gold = $ 20.67 This implied a fixed exchange rate between the pound & dollar; 1 pound sterling = $ 4.247.
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Implementation of floating rate system by bank of England. Competitive devaluation of currencies & increased tariff rate. Effect of beggar-thy-neighbor policies ( world war -2)
As the mission expanded over, the world bank created three official organizations
a. International development association (IDA)provides soft loans. b. International finance corporation (IFC)promotes private sector development. c. Multilateral investment guarantee agency (MIGA)- provides political risk insurance.
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A floating currency is one where targets other than the exchange rate itself are used to administer monetary policy.
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The step eliminates the US dollars monopoly position to set the exchange rate between the two currencies its an important move towards the internationalization of Chinas yuan currency Yuan-Yen trading is due to take place at the Tokyo and Shanghai exchanges.
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