BA 3301 Lecture Notes - Lecture 77: Foreign Exchange Risk, Exchange Rate, Noblesse Oblige
Document Summary
An internaional monetary system needs to provide an orderly adjustment mechanism by which countries can correct internal and external imbalances. An internaional monetary system must also provide suicient internaional liquidity. Conidence or credibility in a inancial system underpins its stability. The role of the imf came into quesion when the system of pegged exchange rates collapsed in the early 1970s. No longer goes the imf mandate and police a paricular exchange rate regime o. Part of imfs rile involves monitoring and soluing members with regard to the naional and internaional consequences of their economic and inancial policies. Imf lending provides inancial assistance to countries with balance-of- payments diiculies. This assistance includes the provision of research, experise and training. Imf provides inancial assistance to countries with balance of payments diiculies. How to set prices in the diferent currencies. Exchange rate risk can signiicantly alter the atraciveness of diferent investments and deals over ime.
