22. A common compromise is to allow flexibility within a band around a given exchange rate peg.

The foreign exchange rate system was freely floating and the country benefited from stable real exchange rates, funded by fiscal and monetary policy and the size of the international reserves.

America s current exchange rate regime is one of floating rates or at least of rates that can float. Back in the 1950s and 1960s, economists like Milton Friedman assumed that a global regime of floating exchange rates would be one in which currency values moved slowly and gradually alongside differences in the economy s inflation and productivity growth rates.

From the point of market performance, over the past year, the two way floating characteristics of RMB exchange rate is outstanding. The elasticity of exchange is expected to be strengthened and the exchange rate is expected to be generally stable.

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.

Since the setting of the November 1998 United Nations operational rates of exchange, the dollar has continued to fluctuate.

On the other hand, flexible exchange rates call for the development of forward markets or markets in futures securities that enable firms to reduce their exchange rate risks.14 In any event, the fact that forward and futures markets for the currencies of most developing countries are likely to be relatively thin reduces the attractiveness of freely floating exchange rates.

Indeed, exchange rate floating is making currency appreciation a recurring feature of some economies.

The procedure has been developed to check automatically the significance of the revisions of exchange rates on a quarterly basis.

7 Note should be made of the currency fluctuations in the course of 2003 that may have played a role in the increase in terms of the United States dollar.

The Hong Kong Monetary Authority bought Hong Kong dollars and sold Hong Kong dollars at the level of 7.85 according to the linked exchange rate system, in order to maintain the stability of the exchange rate of Hong Kong dollars.

The existing exchange rate arrangements in most ESCWA member countries incorporate negative aspects of the two extremes of exchange rate regimes.

The Aide Memoire on exchange rate fluctuations explained that while these fluctuations could cause significant disruption to UNHCR's financial position in the short term, their impact was generally neutralized' over time as the effects on income were offset by similar effects on expenditure.

Exchange rate fluctuation

A more sophisticated approach would be a combination of periodic changes in the central rate to compensate for differences in inflation with trading partners, combined with intermittent and irregular central bank intervention in the market to raise uncertainty about the size and direction of short term movements in the exchange rate (that is to say, vigorous dirty floating ).

For calculating national incomes in United States dollars, conversion rates should be based on MERs, except where that would cause excessive fluctuations and distortions in the income of some Member States, in which case PAREs or other appropriate conversion rates should be employed.

Fluctuation in the exchange rate.

The estimated decreased requirement of 33.9 million in respect of exchange rate fluctuations reflects the recent strengthening of the United States dollar after a period of weakening against a number of currencies.

If the NBU lets the exchange rate float, Ukrainians are likely to exchange billions of dollars into hryvnia, driving up the hryvnia exchange rate. That would contain Ukraine s inflation, as the NBU could restrict the money supply through high interest rates rather than rationing.

If the NBU lets the exchange rate float, Ukrainians are likely to exchange billions of dollars into hryvnia, driving up the hryvnia exchange rate. That would contain Ukraine s inflation, as the NBU could restrict the money supply through high interest rates rather than rationing.

An alternative is to allow some flexibility in the exchange rate so that smaller, daily changes prevent the build up of pressure for a large change.

Likewise, the proposition that rent controls reduce the supply of housing is violated under conditions of imperfect competition. And the proposition that floating exchange rates are an effective system relies on assumptions about the workings of the monetary and financial system that have proved problematic

B. Exchange rate fluctuations

The system to be extended to all field offices will include exchange rate verification.

Hong Kong has implemented the linked exchange rate system for the Hong Kong dollar's peg to the US dollar since 1983.

There was no automated exchange rate control over transactions coming from field offices, which entails a risk of posting the wrong exchange rate.

(n) Reserve for exchange rate fluctuations

Update exchange rates at startup

VI. Contingencies and exchange rate fluctuation

Decreases in exchange rates reflect the strengthening of the United States dollar against the schilling.

Second, exchange rates need to reflect economic fundamentals. But while theory suggests that flexible exchange rates should blunt foreign monetary or financial shocks, in practice, such a currency regime rarely works on its own.

Effect of changes in rates of exchange and inflation

Effects of changes in rates of exchange and inflation

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

It would be adjusted, in accordance with the Agreement, at a certain index rate on that basis, the projection for the 1998 1999 budget would be made, taking into account the exchange rate fluctuations applicable in the recosting process.

For example, under the Plaza Accord, the US joined with Japan, Germany, and other G 7 countries in 1985 to intervene cooperatively to weaken the dollar. Indeed, a majority of countries pursue either fixed exchange rates, exchange rate targets, or managed floating, all of which by definition entail buying and selling foreign exchange to moderate or eliminate exchange rate fluctuations.

(vi) Use of market exchange rates, except where this causes excessive fluctuations or distortions in the income of some Member States, when price adjusted rates of exchange or other appropriate conversion rates are to be employed

Increases at Geneva, Addis Ababa and Bangkok are due to a combination of factors, namely higher rental rates, increase in the space being rented out and currency fluctuations.

(b) Ensure that national exchange rates are consistent with market levels, and that exchange and capital control barriers do not encourage black market activities

President Richard Nixon hailed the 1971 Smithsonian agreement as the most significant monetary agreement in the history of the world. But it was soon in tatters, and the world moved to generalized floating.

Answering this question requires, first and foremost, an understanding of the costs and benefits of various exchange rate systems. The International Monetary Fund was established 70 years ago to manage an adjustable peg system a hybrid system in which exchange rates were usually fixed to the US dollar, but could be adjusted occasionally to improve the country s competitive position in export markets.

The capacity for such adjustments is the hallmark of the flexible exchange rate system indeed, for more than four decades, it has proved time and again to be the key to global macroeconomic stability. As long ago as the period following World War I, countries that adopted an independent monetary policy recovered faster than those that remained locked into the gold standard.

After the collapse of the Bretton Woods exchange rate regime in the early 1970 s, it was widely supposed that a flexible currency system would bring more stability. But, whereas we only recently learned that financial behemoths create financial instability, foreign exchange markets for a long time were characterized by volatility and uncertainty.

Besides enhanced macroeconomic fundamentals and improved multilateral precautionary arrangements, including sufficient official liquidity, floating exchange rates could be helpful.

109. One member noted the current difficult economic situation in Asia, especially the abrupt fluctuations in exchange rates.