On the one hand, pegging local currencies to the dollar renders monetary policy completely ineffective, as in a fixed exchange rate regime.

This logic would be correct if the world were operating under a fixed exchange rate regime, with governments tying official exchange rates to another country s currency or the price of gold. Under these conditions, monetary contraction (or slowing expansion) would have a recessionary (or a less stimulative) impact on other economies.

After considering all other options, including various fixed exchange rate arrangements, a unilateral free exchange rate, integration into a single currency area and dollarization, it was found that monetary coordination between the ESCWA member countries, aimed at adopting a unified exchange rate regime, is the most promising option.

But the fixed exchange rate system also undermined the United States capacity to manage its balance of payments. That is why, in 1971, President Richard Nixon unilaterally abandoned the dollar s convertibility to gold, leaving major currencies exchange rates to float against one another.

CONTRIBUTIONS TO PRODUCTIVE AND REPRODUCTIVE

Furthermore, we have achieved a positive growth rate of 5.5 per cent and stability in the rate of exchange of the national currency.

For monetary items (that is, money held and assets and liabilities and any other balances to be received or paid in fixed or determinable amounts of money) and non monetary items carried at fair value, in accounts maintained in other currencies, the translation into United States dollars is done at the applicable United Nations rates of exchange in effect at the date of the financial statements.

When the United Nations operational rate of exchange for a particular currency is revised, the Executive Director shall revalue the balance of cash and other assets or liabilities in that currency and shall charge or credit the exchange adjustment to a central account, the balance of which at year end shall be classified under miscellaneous income.

From now on, China s government declared, the renminbi s central parity rate will align more closely with the previous day s closing spot rates. This suggests that the devaluation was aimed primarily at giving the markets a greater role in determining the renminbi exchange rate, with the goal of enabling deeper currency reform.

Use of cash income

The favourable exchange rate for major donor currencies to the United States dollar also contributed significantly to the nominal income of UNICEF during the period.

Assumptions on exchange rates between the domestic currency and the United States dollar

It would therefore welcome information on the amount of savings which the Secretariat believed could be achieved by the end of 1997 as a result of currency exchange rate fluctuations, the principal currencies concerned and the anticipated rates of exchange for those currencies.

(a) The Registrar shall establish the operational rates of exchange between the euro and other currencies, on the basis of the operational rates of exchange established by the Secretariat of the United Nations.

The equivalent in United States dollars of other currencies is established on the basis of the United Nations operational rates of exchange.

Second, currencies played an important role as an escape valve in the early days of Asia s post crisis adjustment process. As the region moved from hard exchange rate pegs to floating rates, Asian currencies plunged with drops against the dollar ranging from 28 in South Korea and roughly 37 in Thailand, Malaysia, and the Philippines to almost 80 in Indonesia.

(i) Introduction of reforms in the international monetary system, so as to stabilize exchange rates and discourage international financial speculation

The United Nations operational rates of exchange are the basis for establishing the equivalent in United States dollars of other currencies.

(a) Effective 1 January 2002, the euro should be used as the official currency for those emoluments which are currently set in the national currencies of the twelve euro zone countries, and that the national currency amounts would be converted by applying the respective fixed conversion rates and then rounded up or down to the nearest euro

The disinflation and ample liquidity created by the accommodative monetary policy of central governments have driven the market interest rates down to the extent that the fixed income markets no longer offer the returns that investors have enjoyed in the past.

For this to work, however, the authorities must keep the exchange rate well within the band if the value of the currency approaches the edge of the band, speculative pressures can build, as in the case of a strictly fixed exchange rate.

As the dollar continued to weaken against the Euro and other major currencies, exchange rate fluctuations continued to affect core income positively, accounting for more than two thirds of the increase in regular income in 2004.

Instrument for standardized international reporting of

a A higher real exchange rate signifies a real depreciation of the local currency.

Miscellaneous income currency exchange adjustments

Real exchange rate adjustments inside a monetary union, or among countries with fixed exchange rates, can take place through inflation differentials. The real value of the Chinese renminbi, for example, has appreciated considerably relative to the US dollar, despite limited nominal exchange rate changes, because China s domestic prices have risen faster than have prices in the United States.

A first group for which replacement of MERs would be considered consists of those Member States, often with fixed exchange rates, whose levels of per capita GNI in United States dollars seem clearly out of line with economic reality.

Accounts maintained in other currencies are translated into United States dollars at the time of the transaction at rates of exchange established by the Controller.

For a given supply of money, an increase in the production of goods will increase the value of a currency, because each unit will buy more goods. Likewise, increasing the supply of money relative to a fixed amount of output will lead to a decline in the purchasing power of money, as each currency unit buys fewer goods.

As it is, the valuation of a country s currency is not so much determined by the performance of its economy as by the forces of supply and demand on foreign exchange markets. For a given supply of money, an increase in the production of goods will increase the value of a currency, because each unit will buy more goods.

According to the International Monetary Fund (IMF), the average annual growth rate for the continent is 4 5 per cent, and per capita incomes are on the rise.

Transactions in other currencies are converted for recording into United States dollars, in principle, at the United Nations operational rates of exchange.

(b) Payments in currencies other than the euro will be determined on the basis of the operational rate(s) of exchange prevailing at the time of payment.

To agree, if the fixed exchange rate mechanism is to be used for the next replenishment period, that Parties choosing to pay in national currencies will calculate their contributions based on average United Nations exchange rate for the six month period commencing 1 January 2008.

The transformation in China s banking system, coupled with the recent decision to revalue China s currency, will require major changes in the conduct of monetary policy. Until recently, an exchange rate peg dominated China s monetary policy, with interest rates unchanged for nine years until October 2004, as the government attempted to manage lending through administrative guidance and credit controls.

Currency 1 euro approximately US 1.30 (indicative rate in March 2005)

An unrealized exchange gain of 600,063 resulting from the revaluation of non euro monetary assets and liabilities using the United Nations operational rate of exchange as at 31 December 2004 has not been recorded as income, but set aside within accounts payable other until realized.

Conventional wisdom also once held that dollar borrowing binges occur only in countries with fixed exchange rates, with the central bank de facto insuring borrowers against currency risk. Today, most emerging market economies have (or at least pretend to have) floating exchange rates, and yet locals continue to borrow heavily in foreign currency.

Conventional monetary policy operates by altering short term interest rates, which includes the central bank buying and selling short term government debt. No intervention in the foreign exchange market buying and selling foreign currency is involved.

If the objectives were met fiscal stabilization and renewed growth the discount would disappear. In the same way, after 1993, the French franc initially diverged from its old level, but, in a good policy setting, it then returned within the exchange rate band.

Governments must create an enabling environment by implementing, inter alia, stable monetary fiscal and exchange policies and measures to improve the distribution of income and to deregulate foreign capital.

As a result, the period since the financial crisis of 1998 has generated serious problems for monetary and exchange rate policies. Faced with a balance of payments surplus largely thanks to high oil prices the RCB s 2005 Monetary Program fudges reducing inflation is a priority, but so is exchange rate targeting in order to support growth.

Canada, Australia, and New Zealand, developed economies with floating exchange rates, do not want to encourage currency manipulation. Chile, a middle income country that has long had sound and responsible macroeconomic policies, does not favor currency manipulation.

In that resolution, the Assembly requested the Committee on Contributions, in the context of its review of the scale methodology, to make recommendations based, inter alia, on uniform exchange rates in accordance with certain criteria International Monetary Fund (IMF) rates for members of the Fund rates based on IMF technical advice for other countries and United Nations operational rates for countries for which the two criteria do not apply.

Table 6 Rates of exchange of various currencies relative to the United States dollar and annual rates of inflation for 2004 to 2007, by main duty station