...USE CURRENCY POLICY TO RESTRAIN INFLATION IN VIETNAM UNDER THEORY OF IMPOSSIBLE THREES USE CURRENCY POLICY TO RESTRAIN INFLATION IN VIETNAM UNDER THEORY OF IMPOSSIBLE THREES ------------------------------------------------- VOL 108 05/2011 ------------------------------------------------- VOL 108 05/2011 MAGAZINE ON BANKING SCIENCE AND TRAINING MAGAZINE ON BANKING SCIENCE AND TRAINING INTERNATIONAL EXPERIENCE AND PRACTICE | REASON AND IMPACT OF INCREASE IN CHINESE YUAN VALUE OF CHINA NGUYEN XUAN HONGBanking Academy | | After much pressure on Chinese Yuan (CNY), China made decision on increase in their currency in 6/2010. How will this increase impact on relevant objects? This article aims to find reason and impacte of increase CNY value of Chine on Chinese economy and other countries, including Vietnam | be carefull on exchange rate policy to avoid impact on export. According to economic researcher , adjustment on CNY value may cause instability in Chinese economy due to encouraging investment, increasing independence of economy on external factor, especially when 50% of export comes from foreign-invested enterprises in current. This is contradiction that shall be considered when selecting exchange rate. | 1. CNY exchage rate development before and after increaseValue from 2005 to the date before 21/06/2010: CNY value increased due to application of margin transaction measure, holding CNY to USD rate at CNY=6.83 from 8/2007 | Besides achievement of economic...
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...-------------(((((------------- SUBJECT INTRODUCTION TO BANKING AND FINANCIAL Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG STUDENTS OF TC201DE01-0100 1. Phan Nguyễn Ngọc Xuân Mỹ 101537 2. Vũ Thị Hường 101574 3. Trương Linh Trang 101579 4. Nguyễn Đỗ Thiên Trang 093304 2012 – 2013 -------------(((((------------- SUBJECT INTRODUCTION TO BANKING AND FINANCIAL Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG STUDENTS OF TC201DE01-0100 1. Phan Nguyễn Ngọc Xuân Mỹ 101537 2. Vũ Thị Hường 101574 3. Trương Linh Trang 101579 4. Nguyễn Đỗ Thiên Trang 093304 Note for faculty: Date: ___/___/___ For the writer: (Signature & full name) 2012 – 2013 CONTENTS CONTENTS i INTRODUCTION ii I. Exchange rates 1 I 1. Exchange rates 1 I 2. Exchange rate regimes 2 I 3. Roles of exchange rates 3 II. Compare and contrast between the value of VND and the others of ASEAN 5 II 1. The exchange rates in Vietnam from 2008 to 2010 6 II 2. The exchange rates in Vietnam in 2011 8 III. Impacts on exchange rates 10 III 1. Balance of Trade 10 III 2. Balance of Payments 11 III 3. Monetary Policy 12 III 4. Differentials in Inflation 12 III 5. Differentials in Interest Rates 12 III 6. Public Debt 12 III 7...
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...BUSINESS Vietnam’s central bank adds $4 billion to foreign exchange reserve TUOITRENEWS Picture 1: The State Bank of Vietnam announced at a weekend meeting in Hanoi that it had purchased US$4 billion worth of foreign currencies for the national foreign exchange reserve in the first two months of this year. Tuoi Tre UPDATED : 03/03/2014 13:30 GMT + 7 The State Bank of Vietnam (SBV) purchased US$4 billion worth of foreign currencies for the national foreign exchange reserve in the first two months of this year thanks to stable foreign exchange rates, the chief of SBV announced at a recent meeting in Hanoi on the weekend. SBV made the purchase in the January-February period given the stability of the local financial market, SBV Governor Nguyen Van Binh said Saturday. The purchase that has enriched the national forex reserve, which was reported to have over $30 billion at its disposal by the end of last year, will help stabilize the forex rate in the market, he added. The popular exchange rate between the Vietnamese dong and US dollar quoted at local commercial banks on the weekend were at VND21,060-21,080 and VND21,120-21,130 to the dollar for bid and ask, respectively. The interbank rate quoted at SBV transaction offices has remained unchanged at VND21,036 to the dollar from late June last year. Stability reached The total money supply of the local economy was estimated to rise by 1.94 percent compared to December 2013 and 3.31 percent over the same...
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...Solutions for exchange rate policy of transition economy of Vietnam Dissertation zur Erlangung des Grades Doktor der Wirtschaftswissenschaft (Doctor rerum politicarum, Dr. rer. pol.) der Juristischen und Wirtschaftswissenschaftlichen Fakultät der Martin-Luther-Universität Halle-Wittenberg vorgelegt von M.A. Mai Thu Hien geb. am 23. August 1976 in Hanoi, Vietnam Gutachter: 1. Prof. Dr. Dr. h.c. Rüdiger Pohl, Martin-Luther-Universität Halle-Wittenberg 2. Prof. Dr. Martin Klein, Martin-Luther-Universität Halle-Wittenberg Datum der Einreichung: 07.06.2007 Datum der Verteidigung: 12.07.2007 Halle (Saale), Juli 2007 urn:nbn:de:gbv:3-000012127 [http://nbn-resolving.de/urn/resolver.pl?urn=nbn%3Ade%3Agbv%3A3-000012127] 2 Acknowledgements This doctoral dissertation could not be completed if I have not received the help and encouragement from numerous people. Firstly, I am greatly indebted to my first supervisor, Prof. Dr. Dr. h.c. Rüdiger Pohl, who kept an eye on the progress of my work and was always available when I needed his advices. His great advices, supports, criticisms, comments, and encouragement helped me to develop necessary knowledge to understand and to build theoretical context in this dissertation. I also would like to express my deep gratitude to Prof. Dr. Martin Klein, my second supervisor, for his suggestions and concerns with my dissertation. I gratefully acknowledge the financial support of DAAD, without which this dissertation would not have been...
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...Board of Governors, H.10 release: Foreign Exchange Rates. a. Compute the U.S. dollar–yen exchange rate, E$/¥, and the U.S. dollar–Canadian dollar exchange rate, E$/C$, on June 25, 2010, and June 25, 2009 Answer: June 25, 2009: E$/¥ = 1 / (94.86) = $0.0105/¥ June 25, 2010: E$/¥ = 1 / (89.35) = $0.0112/¥ June 25, 2009: E$/C$ = 1 / (1.084) = $0.9225/C$ June 25, 2010: E$/C$ = 1 / (1.037) = $0.9643/C$ b. What happened to the value of the U.S. dollar relative to the Japanese yen and Canadian dollar between June 25, 2009 and June 25, 2010? Compute the percentage change in the value of the U.S. dollar relative to each currency using the U.S. dollar–foreign currency exchange rates you computed in (a). Answer: Between June 25, 2009 and 2010, both the Canadian dollar and the Japanese yen appreciated relative to the U.S. dollar. The percentage appreciation in the foreign currency relative to the U.S. dollar is: % E$/¥ % E$/¥ ($0.0112 – $0.0105) / $0.0105 = 6.17% ($0.9643 – $0.9225) / $0.9225 = 4.53% S-5 S-6 Solutions ■ Chapter 2 Introduction to Exchange Rates & the Foreign Exchange Market c. Using the information in the table for June 25, 2010, compute the Danish krone–Canadian dollar exchange rate, Ekrone/C$. Answer: Ekrone/C$ = (6.036 kr/$)/(1.037...
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...for a Common Currency in ASEAN Kraiwinee Bunyaratavej, Eugene D. Hahn ASEAN Economic Bulletin, Volume 20, Number 1, April 2003, pp. 49-59 (Article) Published by Institute of Southeast Asian Studies For additional information about this article http://muse.jhu.edu/journals/ase/summary/v020/20.1.bunyaratavej.html Access provided by Bangor University (24 Feb 2014 20:30 GMT) ASEAN Economic Bulletin Vol. 20, No. 1 (2003), pp. 49-59 Convergence and Its Implications for a Common Currency in ASEAN Kraiwinee Bunyaratavej and Eugene D. Hahn The successful introduction of the euro brings renewed interest to the topic of whether similar approaches might be successfully implemented in other regions. One region that may be a promising candidate for this process is Southeast Asia, comprising the ASEAN member countries. These nations have long seen the value of co-operation in order to promote peace, stability, and economic growth. Nonetheless, important differences between the euro area and the ASEAN zone suggest that a wholesale importation of the European approach may be inopportune at the moment. The issues are examined by using economic convergence modelling perspectives. In general, the findings clearly suggest that further work remains before ASEAN will be able to fully benefit from having a single currency area. I. Introduction this is an achievable, or even a desirable, goal. The recent successful introduction of a common printed currency in the euro...
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...the Bretton Woods Agreement, each government obliged to maintain a fixed exchange rate for its currency vis-à-vis the dollar or gold. As one ounce of gold was set equal to $35, fixing a currency’s gold price was equivalent to setting its exchange rate relative to the dollar. The fixed exchange rates were maintained by official intervention in the foreign exchange markets. This intervention was about purchases and sales of dollars by foreign central banks against their own currencies whenever the supply and demand conditions in the market deviate from the agreed on par values. Any dollars acquired by the monetary authorities in the process of an intervention could then be exchanged for gold at the U.S Treasury. In principle, the stability of exchange rates removed uncertainty from international trade and investment transactions. Normally, if a country followed its own policies leading to a higher inflation rate than its trading partners would experience a balance of payments deficit as its good became more expensive, which means its exports will decrease. A deficit has consequences, an increase in the supply of the deficit country’s currency on the foreign exchange markets. The excess supply would demoralize the exchange value of the currency of that country, forcing its authorities to intervene. The nation would be required to buy with its reserves the excess supply of its own currency, in order to reduce the domestic money supply. In addition, as the country’s reserves were depleted...
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...credit. For example, Honda Motor Cycles in China, that company sells the cars to consumers comes with forward contract, it is included the price adjustment clauses. In order to reflect certain exchange rates changes it’s based on the adjusted price. The forward contract also brings more benefit to the consumers that helps them can get lower price. Furthermore, Honda Company has used policy such as purchasing foreign currency by using the currency swaps. This helps to fix the price of the car across currency contract in advance. In the foreign market from Japan’s Honda Co. the car is priced in Yen that means the company faces with foreign exchange risk. Thus, above solution is helpfully to protect subsidiary and reduce transaction exposure. Translation exposure Translation exposure can be established as type of foreign exchange risk that MNC have subsidiaries operated markets oversea (Wang, 2005), which country faced with translation exposure. This is affected on the translation of the liabilities and assets denominated in the foreign currency into the home currency of the parent company when...
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...Nike, Inc. Internal Memo Subject: Porsche Powers Profit With Currency Plays To: Mr. Mark Parker, President and Chief Executive Officer From: Hongjie Pan, Assistant Chief Financial Officer On October 9, 2012, I attended a conference, and the speaker gave a presentation about a report entitled “Porsche Powers Profit With Currency Play”. This report was written by Stephen Power, and it was published in The Wall Street Journal on December 8, 2004. I would like to share what techniques this multi-international company is using to maximize their wealth. The main point of the report was that Porsche used its profit to do investments and hedged the appreciation of the US dollar. Porsche had a great market share in the United States and lots of revenue came from US buyers in US dollars. The Porsche Company betted that US dollars would drop so they bought put options to prevent the currency loss. I suggest Nike should learn from Porsche, and buy call options to prevent currency loss. From the presentation, I found out that Porsche gain more than 80% of the profit of a fiscal year by hedging in 2003. According to the article, “or up to 800 million euros ($1.07 billion) of the 1.1 billion euros Porsche reported for the fiscal year that ended July 31 – came from skillfully executing options.” It showed how important hedging was. Porsche made the right bet on US dollar depreciation in 2004. Porsche not only earned money by hedging the week US dollar, but also using new technology to...
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...its own brand as well as multiple other brands such as, Nike Golf, Nike Pro, Nike+, Nike Skateboarding and subsidiaries including Cole Haan, Hurley International, Umbro and Converse. In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Comparative Advantage Nike uses its involvement in multiple countries to gain some sort of comparative advantage. This refers to the increase in production efficiency through specialisation in separate countries which perform a task in some way better, in this case cheaper. Nike, although based in the US, produces all of its goods outside the US in many different countries. In Shoe production, for example, in 2010 products were produced in Vietnam, China, Indonesia, Thailand and India. This diversification of production gives not only a comparative advantage in cheap labour when producing these shoes, compared to producing domestically, but also gives a closer proximity and possibly cheaper transport costs to large markets such as Europe. Nike also manufactures its shoes in Countries such as Argentina and Brazil using agreements with independent factories. Shoes produced through these agreements are meant primarily for sale...
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... I remember this crisis began in Thailand and that I was reading the business section of Manila Bulletin and one of the headlines was the sudden depreciation of Thailand Baht against the USD. Little did everyone know that a few days later our Philippine Peso would suffer the same fate. Had I known I would have converted all my pesos into USD. Many of the leaders in the Southeast Asian countries, notably the then Malaysian Prime Minister Mahatir Mohammad blamed the Asian financial crisis to currency speculators. Mahatir specifically single out US financial wizard George Soros as the one who was to be blamed for the crisis contagion. Allegedly, Soros speculated heavily against the Malaysian Ringgit and other affected Malaysian currencies. Thus in a matter of days, these Asian currencies plunged against the US Dollars. Should we really blame the market speculators for the cause of the financial crisis in Asia in 1997? According to the author of the article, we should not blame the currency and equity speculators. I agree with him that the Asian Crisis was primarily caused by...
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...Market Ray A. Gray II FIN/366 March 28, 2016 Todd Kucker Eurocurrency Market A eurocurrency is any currency banked outside of its country of origin. The term eurocurrency is actually a misnomer because a eurocurrency can be created anywhere in the world; the persistent euro- prefix reflects the European origin of the market. Eurodollars, which account for about two-thirds of all eurocurrencies, are dollars banked outside of the United States. Other important eurocurrencies include the euro-yen, the euro-deutsche mark, the euro-franc, and the euro-pound (2016). A Eurocurrency market is a money market that provides banking services to a variety of customers by using foreign currencies located outside of the domestic marketplace. The concept does not have anything to do with the European Union or the banks associated with the member countries, although the origins of the concept are heavily derived from the region. Instead, it represents any deposit of foreign currencies into a domestic bank. For example, if Japanese yen is deposited into a bank in the United States, it is considered to be operating under the auspices of the Eurocurrency market. Despite its name, the Eurocurrency market is primarily influenced by the value of the American dollar, since nearly two-thirds of all assets around the globe are represented by U.S. currency. The challenge with foreign banks revolves around the fact that regulations enforced by the Federal Reserve are really only...
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...TA R Y S Y S T E M Gold Standard 1870 1944 Nixon Shock 1971 1976 Bretton Woods Jamaica Agreement T H E G O L D S TA N D A R D T H E G O L D S TA N D A R D • When International trade was limited in volume, payment for goods purchased from another country was made in gold or silver. • As the volume of international trade expanded in the wake of the Industrial Revolution, a more convenient means of financing international trade was needed. T H E G O L D S TA N D A R D • The solution adopted was to arrange for payment in paper currency and for governments to agree to convert the paper currency into gold on demand at a fixed rate. = T H E G O L D S TA N D A R D • 1880: Most of the world’s trading nations including Great Britain, Germany, Japan, and USA adopted the Gold Standard. • Given the Gold Standard, the value of any currency in units of any other currency was easy to determine. T H E G O L D S TA N D A R D • The Gold Standard acts as an adjustment mechanism, which achieves the Balance-of-Trade Equilibrium. T H E G O L D S TA N D A R D 1870 1914 1925 1934 1939 Introduction of the Gold Standard Britain pegged the pound to gold at the pre-war parity level. This priced British goods out of the foreign markets pushing the country into a deep depression Gold Standard was dead The Gold Standard was abandoned as several governments financed their massive military...
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...Albert Winsemius Chair Professor of Economics Director, Economic Growth Centre (EGC) School of Humanities and Social Sciences (HSS) Nanyang Technological University (NTU) S3-01B-38, Nanyang Avenue, Singapore 639798 acylim@ntu.edu.sg The article analyzes the limits of the IMF as a global multilateral economic agency to handle serious balance of payments disequilibria. Capital control and growth rates in developing Asia and the twin deficit problem of the United States are also discussed. It also assesses the probability of the reemergence of an exchange rate crisis in Southeast Asia and the wisdom of having an Asian IMF. “Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” — John Maynard Keynes The Economic Consequences of Peace Keywords: Exchange rate crisis; capital control; growth rates in China and ASEAN; East Asian financial crisis; US twin deficits; IMF; AMF. 1. Post-Crisis Per Capita Income A not well-known fact is that all the six economies in Southeast Asia adversely affected by the 1997/1998 financial crisis have not, until today (November 2005), some eight years later, recovered from the pre-crisis per capita income level in US dollar terms (see Table 1). Thailand’s per capita income in 1996 was US$3,084. After the impressive post-crisis recovery eight years later in 2004, it decreased by 18.3% to US$2,519. Indonesia’s per capita income declined by 10.4%. In other words, the damage the exchange...
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...Introduction: In a global economy fueled by advances in telecommunications and information technologies, offshore outsourcing is evolving from conventional international-trade practices. Every year US companies outsource their task to other countries where they can get their task done by labors at a cheap rate. IT companies can save up to 30 percent in operational expenses when compared to a US-based operations. So, setting up a business in those countries where labors are cheap can be beneficial for the company because of this trend. The ICT industry saw a phenomenal growth over the last decade across the world due to the need of lowering cost and the ability to gain access to talent. The ICT sector of Bangladesh is almost comparable to other countries in the SAARC region. Bangladeshi firms mainly deal with IT enabled services, such as ERP, website development, graphics design, etc. During the last couple of years there has been a new trend in Bangladesh of individual/group based outsourcing which is also known as freelancing. * firms in developed countries look for outsourcing businesses in developing countries because of their comparative advantages, such as low human resource costs, technological skills, language proficiency, and geographic and cultural proximity to major markets. * Such as Maldives, Pakistan, but India is way too far out. * Enterprise Resource planning * Dhaka ranked 3rd in global outsourcing so this states...
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