国际金融研究【英文论文】

Floating exchange rate system generally refers to the free-floating exchange rate system is relative to the fixed exchange rate system is concerned, is a country does not require the national currency and foreign currency exchange rate fluctuations, exchange rate fluctuations do not assume the obligations of the boundaries, and let foreign exchange rates with changes in market supply and demand free-floating. Under this system, foreign exchange fully into the international financial markets, a special commodity, the exchange rate as the price of this commodity trading.

Different exchange rate regimes in the face of international capital flows have an impact on the national economy when the performance difference. In general, choose a floating exchange rate, mainly by market forces to control cross-border capital flows; and the choice of a fixed exchange rate, you need the government to control cross-border capital flows.

\"Ternary paradox\" theory, an independent monetary policy, exchange rate stability and free capital mobility can not simultaneously achieve three goals, while achieving only two. In fact all countries can only choose one of two goals to their advantage.

At present, the fixed exchange rate regime and floating exchange rate system is better is inconclusive.

The benefits of a floating exchange rate system are: (1) floating exchange rate system can guarantee the independence of monetary policy; (2) floating exchange rate can help reduce external shocks; (3) intervention to reduce the exchange rate will be determined by the market, more transparent ; (4) do not need to maintain the huge foreign exchange reserves. But one of the floating exchange rate also has some concerns: (1) in a floating exchange rate regime, the exchange rate will always be a substantial excess volatility, may not be conducive to trade and investment; (2) Since the free floating exchange rate, it may be speculation; (3 ) floating exchange rate system on a country's capacity for macroeconomic management, financial market development and other aspects of higher demand. In reality, not every country can meet these requirements.

The benefits of fixed exchange rate system are: (1) the uncertainty of exchange rate fluctuations will be reduced; (2) the exchange rate can be seen as a nominal anchor (nomina lanchor), price level and inflation is expected to promote stability. However, the fixed exchange rate system, there are some shortcomings: (1) easily lead to currency overvaluation, weaken the competitiveness of local exports, causing long-term unsustainable current account imbalances; (2), while the rigid exchange rate arrangements may be considered implicit exchange rate guarantees, which encourage short-term capital inflows and there is no hedging of foreign debt, damage the health of the local financial system. In the fixed exchange rate system, a State must either sacrifice the independence of its monetary policy, or

restrict free movement of capital, otherwise easily lead to currency and financial crisis.

Floating exchange rate system is the exchange rate, there is a market of supply and demand, without any government intervention in the exchange rate system. In view of a floating exchange rate countries and loose management style is not the same degree, there are many categories of the system. Intervention by the Government, can be divided into free-floating and managed floating. Floating form, can be divided into separate floating and joint float. The currency was pegged by the different, can be divided into a single currency pegged to a floating currency and pegged to the synthesis.

Floating exchange rate regime the exchange rate is determined solely by market supply and demand, without any government intervention in the exchange rate system. In view of a floating exchange rate countries and loose management style is not the same degree, there are many categories of the system.

Intervention by the Government, can be divided into free-floating and managed floating. Floating freely floating exchange rate system: the Government as to make the decision with the foreign exchange market supply and demand of domestic currency with foreign currency exchange rates, do not take any action.

Managed float: limited government intervention to guide the market interest rates to the benefit of the direction of their float.

Floating form, can be divided into separate floating and joint float. The currency was pegged by the different, can be divided into floating and pegged to a single currency pegged to the currency fluctuations synthesis.

Features

First, exchange rate fluctuations in various forms, including free-floating, managed float, pegged float, single float, float, etc. combined.

Second, the floating exchange rate system, not a pure free-floating exchange rate, government rate when necessary, will be overt or covert intervention.

Third, due to exchange rate changes are determined by market supply and demand conditions, so a floating exchange rate than a fixed exchange rate fluctuations to be frequent, and large amplitude.

Fourth, the SDR currency basket exchange rate as part of a system. Edit this paragraph floating exchange rate system

First, an overview of the floating exchange rate system

A floating exchange rate system, meaning

1 concept: a country's monetary authorities are not provided in national currency and foreign currency parity and exchange rate volatility, monetary authorities do not assume the obligation to limit exchange rate fluctuations, and

allow the exchange rate with the foreign exchange market supply and demand fluctuations in a free floating exchange rate system exchange rate system.

Completely left to the spontaneous formation of the exchange rate market supply and demand, without any intervention of the state to take little or no. Governments tend to be based on their specific circumstances, explicitly or implicitly on the foreign exchange market intervention to varying degrees.

⑴ the center of the U.S. dollar since the fixed exchange rate system collapsed in 1973, mainly Western countries generally adopted a floating exchange rate system. But the floating exchange rate system is not only appeared after 1973, the new exchange rate system.

In 1879 the United States began formal implementation of the gold standard before, was not too long a time, through the implementation of a floating exchange rate system. After widespread use of the gold standard in the country, some of the silver standard countries, the exchange rate is still often fluctuate. For example, India has been implemented in 13, before the silver standard, the Indian rupee and the currency exchange rate between gold standard countries, often with the parity of gold and silver fluctuates. Austria-Hungary's currency shield bill in 11 formally adopted the gold standard before it was once in a floating state; even after 11, there is still a short period of floating. Russian ruble in 17, before the implementation of the gold standard, has also been practiced floating.

March 1919 to 1926 (except 1924), the French franc completely control the implementation of the floating exchange rate system. In the 1930s Great Depression was the end of 1932 the British tried a floating exchange rate system. United States from April 1933 to January 1934 is also a floating exchange rate system. Even in the dollar-centered system of fixed exchange rate period, it still has a certain period in which many countries had implemented a floating exchange rate system.

September 1950, Canada adopted a floating exchange rate, until the end of May 1962 and then revert to a fixed exchange rate, but by the end of May 1970 and to implement a floating exchange rate. May 1971, Federal Republic of Germany and the Netherlands adopted a floating exchange rate system. In August 1971 the U.S. government to stop the gold dollar, most Western countries have floating exchange rates, until December 1971, \"Washington Agreement (Washington Arseement)\" only after the recovery of fixed exchange rates. Early 1973, was attacked by a new dollar crisis, a large number of major financial markets to sell dollars, buy mark and yen, gold prices, foreign exchange market closed. On 12 February the same year, the U.S. government 10 per cent depreciation of the dollar again, Huang Jinguan price from $ 38 an ounce to $ 42.23.

The second dollar devaluation, the Western countries adopted a floating exchange rate system in general. In January 1976. Officially recognized by the International Monetary Fund floating exchange rate system. April 1978, the IMF Council adopted \"Regulations on the second revision of the Agreement\

abolished the dollar-centered international monetary system. Thus, the floating exchange rate system in the world to obtain a legal status. Edit this paragraph types

Intervention by the Government to divide

1. Free-floating or clean floating: refers to the exchange rate, foreign exchange market by the supply and demand situation on the decision to free up a floating exchange rate system off, free adjustment, the Government does not intervene.

2. Dirty floating or managed floating: that a country's monetary authorities to make the national currency's foreign exchange rate fluctuations will not be too large, or the exchange rate is conducive to their economic development toward the direction of change, by all means, explicitly or implicitly on the foreign exchange market intervention. Extent by floating or floating mode split

⒈ peg type or inelastic type. The local currency at a fixed parity or mixed with a certain kind of foreign currency linked to foreign currency and local currency exchange rate with other currencies and other currencies pegged to floating exchange rates fluctuate.

⑴ pegged to a currency: in history, geography, and other various reasons, some countries, foreign trade, financial transactions mainly an industrial developed countries, or the main use of a foreign currency.

To make this trade, finance and stable development of relations, from the frequent changes in the exchange rate between the adverse effects of currency in these countries often pegged to the currency of the industrialized countries. For example, some American countries live in U.S. currency floating needle; some former French colonies such as floating the currency pegged to the French franc. As of December 31, 1994, countries peg to the dollar 23, peg 14 countries have French franc, the other needle to live the single currency countries have nine.

⑵ peg \"basket\" (also called \"package\") currency. Usually caused by a basket of currencies of several major world currency or economic ties with the national currency of the country most closely formed. SDR is one of the most famous of a basket of currencies, which consists of U.S. dollar, yen, pound, mark and French franc and other five currencies according to the proportion of different composition, its price as the five daily currency exchange rate changes are adjusted daily by the International Monetary Fund announced.

The other a basket of currencies pegged to the currency composition of the policy by the national freedom of choice and adjustment. This variable has two characteristics, namely, preservation, and second, the small fluctuations, exchange rate stability. Implementation of this exchange rate system the main purpose is to avoid a national currency by currency domination. To the end of 1994, countries have pegged to SDR 4, pegged to a basket of currencies of other countries 21.

⒉ limited flexibility or limited flexibility type type.

A country's currency exchange rate pegged to a currency or a group of currency fluctuations, but to live with the needle exchange rates between currencies have greater volatility.

⑴ peg a currency float. Also known as a currency relative to the limited floating: Its biggest feature is to allow a certain degree of volatility, the range must maintain currency exchange rate peg in the range of 2.25% (this rate is more than

High flexibility in front of people and spoke of \"a currency peg\" type non-existent problem of exchange rate volatility, even if there are fluctuations, the amplitude is very small, usually no more than the minimum 1.0%. Currently limited relative to the currency fluctuations of four countries. Floating exchange rate system to live a currency float needle: said joint float or overall float, is close to some of the economic group of nations, the currency in the Member States and provides a fixed exchange rate between the volatility of the currencies of other countries are implementing joint floating, floating rate that is broadly consistent.

This form is floating in March 1973 by the European Community of six countries (France, Federal Republic of Germany, the Netherlands, Luxembourg, Belgium; Denmark) and non-community in Sweden and Norway to jointly build a floating group began to implement the joint, which provides that member States maintained a fixed exchange rate between currencies, the volatility limit at 2.25 percent. When two members of the exchange rate between the currency beyond that, the two central banks have an obligation to intervene. For the member currencies and the exchange rate between the currencies of other countries are

allowed by the market supply and demand fluctuate on their own, without intervention, but its floating rate to maintain roughly the same, the joint float. British pound and Italian lira Though once to join the joint float system, but in September 1992 the European financial market turmoil in the exit. As of late December 1994, in the European Monetary System currencies, including the German mark, French franc, Dutch guilder, Belgian franc, Danish krone, Irish pound, Spanish peseta, Portuguese escudo and the Austrian schilling.

⒊ more flexible or highly flexible type of model. That the magnitude of exchange rate fluctuations are not restricted to the principle of independence for exchange rate adjustment.

⑴ float based on a set of indicators. Targets vary from country to country, but mostly based on the country's foreign exchange reserves, balance of payments, consumer price index and trade with its close ties to the countries such as price changes in the adjusted basis of national currency exchange rate fluctuations. The current implementation of this system in the country of Chile, Ecuador, Nicaragua and other three countries.

⑵ more flexible managed float. Refers to a government of the exchange rate system and the transfer of a certain degree of intervention. However, this approach often fail to achieve a floating effect, so that fluctuations in the exchange rate is going into. Using this approach are floating in China, Singapore, South Korea and other 32 countries.

⑶ separate float. Refers to a single floating currency without any foreign currency with the formation of a fixed parity, the exchange rate based on supply and demand of the foreign exchange market floating. With this way of floating the United States, Japan, Britain and other 58 countries.

The classification is based on a floating elastic IMF inductive way, easy to be widely accepted.

Characteristics of a floating exchange rate

⒈ frequent fluctuations in exchange rates and the rate of rapid change. Floating exchange rate system in a floating exchange rate system, governments no longer required as legal currency in the exchange rate parity and the boundaries, do not assume the obligation to maintain exchange rate stability, exchange rate determined by market supply and demand. The fluctuations of the frequent, large amplitude is far under the fixed exchange rate regime can not be compared. He fixed rate times a day up to 5% or more a week, more than 10% volatile escape. A case of political and economic situation changes, the greater volatility. Frequent exchange rate volatility on the international economic order has brought instability.

⒉ managed floating is common.

In a floating exchange rate system, a completely free floating exchange rate is non-existent. National monetary authorities for a variety of motives and

considerations, have taken measures to varying degrees, the floating exchange rate intervention, it is actually a managed float. But the intensity of intervention, intervention frequency size are different.

⒊ floating alone is subject.

IMF statistics show that in a variety of exchange rate arrangements, the individual is the main float in 1994 has reached 58 countries, accounting for 32.6% IMF178 member to form a one-third of the world situation. As the most industrialized countries have implemented floating alone way, and they total foreign trade of the whole world about 70% of total trade, so they in the international financial sector occupies a pivotal position. It alone is the current of a floating exchange rate floating main ways. Countries with floating joint 10, together with a separate floating state, accounting for 38.2% of IMF members. These two ways of floating currencies, including the world's major currencies and most of all the major international reserve currency, so the above two systems constitute the mainstream of a floating exchange rate system. More flexible way of a managed float in 32 countries, accounting for 18%, but also should give adequate priority to a floating system.