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When China’s monetary policy is analyzed, one thing stands out presently – there is a continued incline in importation of products into China at a rate higher than the exports growth. Secondly, after the peg of the Chinese Yuan to the dollar, the Chinese currency’s real trade-weighted value declined. This is notable mostly since the beginning months of 2002, at a time when the US dollar reached its peak value.
China is a great economy in the making. At this point in time, the metrics of China’s currency are largely undervalued and others unlisted. China’s Current Account has been growing at a steep surplus since 2007. For instance, the current account ran at US$17 billion last budget year as compared to US$4.6 billion in 2001. That is giant leap in just six years. This ensues in a 1.5 percent growth in Gross Domestic Product, an outstanding feat for such a massive economy. To realize how big the growth is in China, as other countries go under in the global economic crises, let us compare two more years, 2003 and 2004. China’s economy ran a trade surplus on the Current Account, of an amazing US$32 billion in the year 2004 as compared to a surplus of US$25.5 billion in 2003.
This is indicative of some thing being done right in China’s economy. Experts feel that this kind of growth rate is unsustainable due to the heightened pace as evidenced by the Continue reading Monetary Policy in China
Tags: China monetary market, China’s monetary policy, normal capital inflows, huge external surplus, Economy of the People's Republic of China, economic policy fundamentals
In a way, the IMF has been successful since it was established back in July, 1944. From its genesis, it has consistently worked to foster optimal global monetary cooperation for the general good of member states. The aim has been to secure the financial stability of world nations and facilitate a mutually benefiting international trade among these nations. This in return could boost both poverty reduction measures and promote high employment. With criticism to the institution considered, the International Monetary Fund has helped instigate a sustainable economic growth in most member states, apart from the third world countries which continue to trade in complete dependence of the international market.
The International Monetary Fund (IMF) was a Bretton-Woods brainchild as an international organization that regulated economic policies in member countries that impact on both the exchange rates in the global market and the balance of payments. In playing this role, the International Monetary Fund was charged with the responsibility of stabilizing international exchange rates in a way that could facilitate development in the world economy. Besides that, the IMF became a facility that offered highly leveraged loans to third world countries to aid them in establishing economic independence.
From the original 44 member states, the monetary fund has grown in membership to subscribe 186 nations to date. Kosovo was the last state to gain membership. Most of the nations under the United Nations Charter have Continue reading Introduction to The International Monetary Fund
Tags: original 44 member, global monetary cooperation, member state economies, fund’s managing director, Board of Governors
The current monetary system has been blamed for the frequent episodes of turmoil that shock the world in the form of financial crises. Many economists argue in support of a new global financial order whereby only one currency will be in use. This, they argue, would remove the control of currencies from the hands of a few people.
The current financial order where each country controls its own currency was started by the elite and the influential. Many economists are today concerned that the issue of instituting a single world currency should be considered as an emergency. The quest for an economically harmonized world traces its roots to the drafting and signing by various countries of the Bretton-Woods Agreement as early as 1944.
The Bretton-Woods Agreement was spurred by the economic depression that was witnessed in the 1930s and during the Second World War. The current global economic crisis presents the world with another chance of imposing sterner regulations on national sovereign economies. Continue reading Prospects of a One World Currency
Tags: national sovereign economies, bretton woods agreement, One World Currency, global financial order, Prime Minister Gordon Brown
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