Currency relations in the global economy. Lecture: Currency relations in the global economy

Economic relations associated with the functioning of world money and serving various types of international economic relations (foreign trade, migration of capital and labor, reinvestment of profits, transfer of income, loans and subsidies, scientific and technical exchange, tourism, etc.) are called currency relations relationships.

It is necessary to distinguish between national and world monetary systems. The first expresses the form of organization of currency relations of a given country, determined by national legislation, the second - the form of international currency relations, legally established by interstate agreements.

The national monetary system includes the following main elements: national currency, official gold and foreign exchange reserves and their composition, currency parity, currency convertibility conditions, currency restrictions (if any), procedures and forms of international payments. It is inextricably linked with the country's monetary system.

The world monetary system is gold reserve (key) currencies, international monetary units of account (SDR), the composition and structure of international currency liquidity, the regime of international loans and exchange rates, conditions for the mutual convertibility of currencies, international

monetary institutions, such as the International Monetary Fund (IMF).

Stages of development of the world monetary system

The world monetary system developed spontaneously in the process of establishing a solid gold currency at the end of the 19th century. in most developed countries of the world (in Russia - since 1897). Central banks were required to exchange paper money for gold at par, there was free import and export of gold, countries' exchange rates were determined on the basis of gold parities of national monetary units and fluctuated within the “golden points” associated with the costs of moving gold between countries. A gold standard was introduced, which implied the mandatory use of gold in international payments through its free flow from one country to another. The state had to monitor only the use of gold of a certain weight and purity, maintain the parity of paper money (banknotes, treasury notes and other banknotes) with gold, and have the necessary reserves of gold in order to eliminate imbalances in the balance of payments.

With the outbreak of World War I, the gold standard ceased to exist, and in 1922, at the Genoa Conference, an agreement was reached on the transition to a gold exchange standard. This meant that the main means of international payments became gold substitutes - mottos, i.e. national or collective currencies. Credit and non-cash money began to occupy dominant positions. As a result, the economic tools of government bodies for carrying out international payments and regulating the balance of payments expanded significantly, which ultimately led to the replacement of the gold standard system.

Having not really recovered from the consequences of the Great Depression, countries were again drawn into a world war, from which some emerged strengthening their leading position (USA), others were defeated (Germany, Italy, Japan), and others were weakened (France, Great Britain). This left an additional imprint on the state of international payments after the Second World War.

At the Bretton Woods Conference in 1944, the participating countries agreed on a gold exchange standard and mutual convertibility of currencies. The US dollar and, to some extent, the British pound sterling began to serve, along with gold, as reserve currencies. Moreover, a constant price for a troy ounce of gold (31.1 g) was set at $35. International regulation of currency relations began to be carried out through a newly formed specialized organization - the International Monetary Fund.

The principles of the Bretton Woods agreement were in effect until the mid-70s, when the connection between currencies and gold was undermined as a result of the global currency crisis. In particular, the share of the US dollar in the gold and foreign exchange reserves of all countries increased from 9% in 1950 to 75% in 1970. In addition, the negative balance of payments was growing in the United States, which was actively repaid not with gold, but with dollars. The potential for this crisis was built into the Bretton Woods monetary system itself. The fact is that the expansion of economic and payment relations required an increase in reserves and maintaining an optimal ratio of gold and currencies in them. The lack of reserves had a restraining effect on world trade. In response to the demand of the world community to exchange dollars for gold, the United States unilaterally stopped the exchange of American currency for gold on August 15, 1971. The consequence of this act was floating exchange rates, which opened the way to manipulation in the international foreign exchange market.

In 1976, new principles of the world monetary system were officially developed at the Jamaica (Kingston) Conference. The Jamaican currency system was based on special drawing rights (SDR - unit of account), floating exchange rates, and the determining and regulating functions of the IMF. With the entry into force of amendments to the IMF Charter in 1978, a certain streamlining of the international monetary system took place. In accordance with them, the official price of gold was abolished, the system of floating exchange rates was officially consolidated, the coordination of the foreign and domestic policies of the IMF member countries was strengthened, and the intention was declared to turn the SDR into the main reserve currency asset. Efforts made to regulate exchange rates ultimately led to the formation of a system of managed floating of exchange rates. As a result, a foreign exchange market has emerged in which national currencies take the same forms as monetary units on the domestic market.

Thus, a motto system began to operate in international payments, which abolished the exchange of any national currency for gold. Special Drawing Rights (SDRs) have become the standard of world money. However, this world monetary unit remained the settlement one. There was demonetization of gold. It has become one of the goods, the price of which is set in accordance with the laws of the market. However, gold remains a special commodity liquid asset that can be transformed into money at any time.

The SDR assessment began to be carried out on the basis of a currency “basket”, which consists of national currencies in the following ratio: US dollar - 42%, main Western European units (pound sterling, mark, franc) - 45%, Japanese yen - 13%.

INTRODUCTION

The purpose of our research is to study the functioning of world monetary relations. The topic “World Monetary Relations” is quite extensive, so we will limit ourselves to the most important issues. In our work we will consider the following tasks:

Studying the theoretical foundations of currency relations,

Study of the functioning of monetary policy,

Study of institutions of the global financial system.

The topic of work “World monetary relations” in the course “Economic Theory” occupies one of the important places. The problems discussed in the work are of particular relevance, since a new architecture of the world’s monetary and financial system is currently being built. The degree of scientific development of the topic under study is very small.

The object of our research is world monetary relations. The theoretical basis of the study includes the evolution, essence and functions of the global monetary system; characteristics of the main elements of the world monetary system; current state of the foreign exchange market; exchanges and auctions in Russia. The methodological basis of the study is market and state regulation of currency relations; monetary policy and its forms; characteristics of institutions of the global financial system; modern trends in regulation of the global financial system.

International monetary relations are an integral part and one of the most complex areas of the market economy. They focus on the problems of the national and world economy, the development of which historically runs parallel and is closely intertwined. With the internationalization of economic relations, international flows of goods, services, and especially capital and loans increase.

Leading industrialized countries, which act as rival partners, have a great influence on international monetary relations. Recent decades have been marked by the intensification of developing countries in this area.

Under the influence of many factors, the functioning of international monetary relations has become more complex and is characterized by frequent changes. Consequently, the study of world experience is of great interest for the emerging market economy in Russia and other CIS countries. The gradual integration of Russia into the world community, entry into the International Monetary Fund and the International Bank for Reconstruction and Development group require knowledge of the generally accepted code of conduct in the world markets of currencies, loans, securities, and gold.

1. THEORETICAL FOUNDATIONS OF CURRENCY RELATIONS

1.1 Evolution, essence and main functions of the world monetary system

The export of capital, international trade in goods and services, scientific and technical cooperation determine mutual monetary demands and obligations of subjects of world economic relations. The set of monetary relations that determine payment and settlement transactions between national economies is called currency relations.

To regulate the emerging currency relations between countries, it is necessary monetary system.

First world monetary system in the shape of gold coin standard arose spontaneously as a result of the industrial revolution of the 19th century and the expansion of international trade. During this period, the national and international monetary systems were identical, gold served as world money, and on the world market payments were accepted by its weight.

As free competition capitalism developed into a monopoly, the classical gold coin standard ceased to correspond to the scale of economic relations and hampered the regulation of the economy, monetary and currency systems in the interests of monopolies and the state. During the First World War, the exchange of banknotes for gold in capitalist countries (except the USA) was suspended and the gold standard was abolished. Gold was withdrawn from internal circulation and replaced with banknotes that were not redeemable for gold. In international payment circulation, the free movement of gold between countries was prohibited.

After the First World War came the second stage in the evolution of the world monetary system, called the “gold exchange standard”.

During the period of relative stabilization as a result of monetary reforms of 1924-1928, “gold monometallism” was restored, but somewhat modified in two new forms: 1) gold bullion, 2) gold exchange.

At gold bullion standard In the country there is no direct exchange of banknotes for gold coins; exchange for gold took place in the form of exchange for gold bars of a certain weight and standard. Thus, gold began to serve in fact only as a reserve for international payments.

Gold exchange standard was a form of the gold standard in which national banknotes were exchanged not for gold, but for the currencies of other countries (for mottos, which in turn were exchanged for gold bars).

The widespread use of the gold exchange standard cemented the possible dependence of some countries on others: the US dollar and the British pound sterling became the basis of a number of currencies.

However, the motto forms of the gold standard did not last long. The global crisis of 1929-1931 completely destroyed this system. The crisis also affected the “key currencies” - the British pound sterling and the US dollar.

Since 1944 comes the third stage in the evolution of the world monetary system: At the Bretton Woods Conference, a gold exchange standard was adopted, based on gold and two “key currencies” - the US dollar and the pound sterling, which is why the name is more common gold exchange standard.

The Bretton Woods monetary system placed the dollar in a privileged position and gave economic and political advantages to the United States. The dollar monopolized foreign trade payments.

As the economic positions of the EEC and Japan strengthened, the competitiveness of the United States in world markets decreased. This currency system has ceased to meet the needs of the world economy. In the late 60s and early 70s, a new crisis broke out in the international economic system.

In 1976, at a meeting in Kingston, Jamaica, representatives of 20 capitalist countries reached an agreement on reforming the world monetary system and in 1978 the Jamaica Agreements were ratified by the majority of IMF member countries. From this moment it begins the current stage of development of the world monetary system, and the new world monetary system was called Jamaican monetary system. The Jamaican agreements introduced the following into the mechanism of currency relations: main changes:

The collapse of the gold-dollar standard has been confirmed;

The demonetization of gold, the abolition of its “official price” and any linking of currencies to gold have been recorded;

Central banks were allowed to buy and sell gold as an ordinary commodity at "free" market prices;

The standard of value (for establishing currency exchange rates, valuing official assets, etc.) became special drawing rights (SDRs) - international payment and reserve funds issued by the IMF and used for non-cash international payments through entries in special accounts of IMF member countries. The functions of the SDR include: regulation of balances of payments, replenishment of official foreign exchange reserves, comparison of the value of national currencies;

The dollar is officially equal to other reserve currencies (German mark, Swiss franc, yen);

The regime of freely floating exchange rates was legalized (within the framework of the IMF and the World Bank);

The scope of interstate currency regulation has expanded;

The creation of closed currency blocs has been legalized, which are full participants in the international monetary system, but within them there are special relations between the participants.

Monetary system – This is a set of monetary relations that have developed on the basis of the internationalization of economic life and the development of the world market and enshrined in international treaty and state legal norms.

As economic relations internationalize, national, regional and global monetary systems are formed. Originally arose national currency system – This is a form of organization of a country’s currency relations, which has developed historically and is enshrined in national legislation, as well as the customs of international law.

The national currency system is assigned a number of functions:

Formation and use of foreign exchange resources;

Ensuring foreign economic relations of the country;

Ensuring optimal conditions for the functioning of the national

farms.

The world and regional currency systems are international and serve the mutual exchange of results of the activities of national economies.

Regional monetary system – This is a form of organization of currency relations of a number of states, enshrined in interstate agreements and in the creation of interregional financial and credit institutions. The most striking example of a currency system of this level is the European Monetary System.

World monetary system – This is a global form of organizing currency relations within the world economy, secured by multilateral interstate agreements and regulated by international monetary and financial organizations.

The world monetary system includes, on the one hand, currency relations, and on the other, the currency mechanism. Currency relations are everyday connections into which individuals, firms, and banks enter into the foreign exchange and money markets in order to carry out international payments, credit and foreign exchange transactions.

Monetary mechanism represents legal norms and the instruments representing them at both the national and international levels.

The main functions of the world monetary system:

Mediation of international economic relations;

Ensuring payment and settlement turnover within the global economy;

Providing the necessary conditions for the normal reproduction process and uninterrupted sale of manufactured goods;

Regulation and coordination of the regimes of national currency systems;

Unification and standardization of the principles of currency relations.

National and international monetary systems consist of a number of similar elements, which, however, perform different tasks and functions and reflect the conditions of which of these systems (Table 1).

Table 1 – Main elements of the national and world monetary systems

National currency system

World monetary system

1) national currency unit; 2) conditions for the convertibility of the national currency; 3) national currency parity; 4) exchange rate regime; 5) the presence or absence of currency restrictions; 6) regulation of the use of international credit funds of circulation; 7) regulation of the country’s foreign economic settlements, the regime of the national currency market, the regime of the national gold market; 8) composition and structure of the country’s liquidity; 9) national government bodies regulating the country’s currency relations

1) reserve currencies and international monetary units of account; 2) conditions for mutual convertibility of currencies; 3) a unified regime of currency parities; 4) regulation of exchange rate regimes; 5) interstate regulation of currency restrictions; 6) interstate regulation of international currency liquidity; 7) unification of forms of international payments, regime of world currency markets and gold markets; 8) unification of the use of international credit funds of circulation; 9) international organizations carrying out interstate currency regulation

World monetary system n Historically established form of organization and regulation of international monetary relations, secured by interstate agreements in the form of methods, instruments and interstate bodies with the help of which international payment and settlement 4

PARIS MONETARY SYSTEM - GOLD STANDARD The basis of the system was laid by the Bank of London in 1821, introducing the gold standard for the pound sterling, it received final legal registration at the Paris Conference in 1868. The main principles of the Paris monetary system were: 1. gold is the only form of world money , it circulates freely; 2. rates of national currencies are strictly fixed to gold and through it to each other; 3. Central banks of countries can buy and sell gold without any restrictions; 4. any person can use gold without any restrictions, including minting coins at the state mint; 5. Import and export of gold are not limited in any way. 5

PARIS MONETARY SYSTEM – 2 Within the framework of the Paris monetary system, several subsystems can be distinguished: the gold coin standard (until the beginning of the twentieth century), under which gold coins were minted, their free exchange for banknotes, import and export of gold was practiced; ngold bullion standard (before the start of the First World War), under which gold bullion was circulated only in payments between countries. ngold exchange standard (or the Genoese currency system), within which, along with gold, the currencies of leading countries were used. The gold exchange standard was in effect until the end of the 30s. 6

GENOVA MONETARY SYSTEM The First World War undermined the gold standard system. At the international Genoa conference in 1922, a decision was made to transition to a gold exchange system. Its essence is that in 30 participating countries, along with gold, the mottos - foreign currency - were used for international payments. At the same time, only the dollar, pound sterling and French franc had real gold backing. The exchange of banknotes for gold (in payments between countries) could be carried out both directly and indirectly, through the currencies of the countries participating in the system. Countries that had become impoverished during the war now had a way to make international payments, and the United States became even richer. 7

EVALUATION OF THE GOLD STANDARD SYSTEM Advantages of the gold standard system: n n n stability and predictability of exchange rates; stability of monetary circulation in the country; automatic adjustment of the balance of payments; general economic stability; the stability of gold as a currency. Disadvantages of the gold standard system: n n the system does not leave room for active government action (sometimes it is economically feasible to raise or lower the exchange rate of the national currency); the internal economic development of the country turned out to be completely subordinate to the state of the balance of payments, i.e., foreign economic relations; the system could only operate in conditions when the country was producing gold. The outflow of gold and the lack of its own deposits led to the country falling out of the gold standard system. The inflexibility of gold as a medium of exchange. 8

BRETTON WOODS SYSTEM OF FIXED CURRENCY RATES The decision to create a new international monetary system was made in 1944 in the American town of Bretton Woods. The main principles of the Bretton Woods system were: n The basis of the system was again formed by gold, but the only currency that had a gold content was the US dollar, since they concentrated 70% of the world's gold reserves. n Other currencies were equated to the dollar, and through it to gold. The gold content of the dollar was $35 = 1 troy ounce = 31.1 g. Thus, the national currency - the US dollar - became the world reserve currency, the main means of international payments. n Exchange rates were fixed, firm, the central banks of countries maintained a stable exchange rate of their currencies against the dollar through foreign exchange interventions within ± 1%, in 1971 -73. - ± 2.25. n At the same time, exchange rates could now be changed more widely, within 10%, through devaluation and revaluation, which were excluded under the gold standard system (changes in the exchange rate over 10% required the consent of the International Monetary Fund). n The International Monetary Fund and the International Bank for Reconstruction and Development became important parts of the new system. 9

THE COLLAPSE OF THE BRETTON WOODS SYSTEM Until the 60s. The Bretton Woods system functioned successfully, ensuring the post-war restoration and development of the economies of Europe, Japan, the USA and a number of other countries. The main reasons for the collapse of the Bretton Woods system were: n Countries were unable to pursue a common economic policy. n Uneven and increased rates of inflation led to significant fluctuations in exchange rates. n The principle of American-centrism came into conflict with the emergence of new economic centers - Western Europe and Japan. nThe “reserve currency paradox” - a large market for Eurodollars, or “dollars without a homeland,” gradually formed. n Large US spending on the Vietnam War. In 1971 -1973 the system ceased to exist. 10

JAMAICA MONETARY SYSTEM Kingston The new monetary system was created in 1976 at an IMF conference in Kingston (Jamaica). The basic principles of the new monetary system were: 1. No currency has a gold content and is not exchangeable for gold. The country independently chooses the exchange rate regime, but it is prohibited from doing this through gold. 2. The new system is based not on one, but on many currencies. Attempts were made to create conditional collective currencies - SDR - Special Drawing Rights, Special Drawing Rights (SDR) and ECU - European Currency Unit (ECU). 3. In the Jamaican currency system there are no limits to fluctuations in exchange rates, which are formed under the influence of supply and demand. However, the central banks of countries have a significant influence on exchange rate fluctuations by buying and selling currencies (foreign exchange interventions) and thereby contribute to the stabilization of exchange rates. eleven

JAMAICA MONETARY SYSTEM – 2 Within the framework of the Jamaican currency system, several exchange rate systems have developed. 1). Fixed exchange rates a). The exchange rate of the national currency is fixed in relation to one, voluntarily chosen, currency and automatically changes with it. As a rule, exchange rates are fixed to the US dollar, pound sterling, and euro. b). The national currency exchange rate is fixed to the SDR. V). The exchange rate of the national currency is fixed in relation to a “basket” of voluntarily selected currencies. G). The exchange rate of the national currency is set on the basis of a sliding parity, taking into account the dynamics of price growth. 2). Free swimming. It contains the leading currencies - the USA, Great Britain, Switzerland, Japan, Canada, Israel, South Africa and some others. However, when exchange rates fluctuate sharply, central banks maintain the exchange rates of their currencies, so that this “free” float is in fact a controlled float (dirty float). 3). Mixed or group swimming. Such group swimming is typical for member countries of the EEC (EU) and continues today, after the introduction of the euro. OPEC countries established a special exchange rate regime, linking their national currencies to the price of oil. 12

EUROPEAN MONETARY SYSTEM Given the instability of the Jamaican system, the countries of the EEC (EU) decided in 1979 to create the European Monetary System (EMS), or European Monetary System (EMS). Initially, the EMU included 6 European countries, then their number grew to 12, now there are 28 countries. The main goals of the EMU were: Ensuring economic integration. Creation of a zone of European exchange rate stability based on its own currency. Protecting the market from dollar expansion. The dollar was used in 60% of world trade transactions, despite the fact that the US share of global GDP was 20%. Bringing together the economic policies of the participating countries. 13

EUROPEAN MONETARY SYSTEM -2 The basic principles of the EMU during its creation were: 1. The basis of the monetary system was the conventional currency ECU (1979). Its exchange rate was determined based on a basket of currencies of all 12 countries that were then part of the EEC. Since 1999, the role of the ECU began to be played by the euro (EUR), which was equated to the ECU as 1: 1. Since 2002, the euro has acquired a cash form. 2. Unlike the Jamaican monetary system, the EMU is based on gold reserves - more than 2800 tons of gold (approximately 20% of the gold reserves of the member countries), which, however, did not leave their countries, but were only recorded in the accounts of the European Central Bank . 3. A unique exchange rate regime was established. “European currency snake” is a type of internal exchange rate that was based on the joint floating of the currencies of the member countries within the established limits of mutual fluctuations (before 1993 ± 2.25%, since 1993 ± 15%). The second type of exchange rate, external, “snake in the tunnel,” was established for transactions with other countries and was a curve that described fluctuations in EU currency rates relative to the exchange rates of external countries. 4. The European Central Bank has been operating since 1998. The European Monetary Fund was also created. 14

CURRENCY 1. The national monetary unit of a country is currency in the narrow sense of the word. For example, the Russian currency is the ruble, the US currency is the dollar, and the Brazilian currency is the Cruzeiro. 2. But in a broad sense, the category of currency includes various means of circulation expressed in the corresponding monetary units. This is cash in the form of coins, banknotes, treasury notes, payment documents (checks, bills) and funds in bank accounts and deposits. 3. The concept of currency values ​​is even broader, which also includes stock securities (stocks, bonds) in one currency or another and precious metals. 16

CURRENCY There are many definitions of the concept of "currency". Foreign currency – foreign banknotes (currency notes of other countries), coins, bills, checks. n Reserve currency is a foreign currency in which the Central banks of countries place their reserves for international payments for foreign trade transactions, for the movement of loan capital, for investments. In the Bretton Woods currency system, reserve status was assigned to the US dollar and (in fact) to the British pound sterling. Nowadays, the official status of a reserve currency is not assigned to any monetary unit, but in practice this role is played by the dollar, British pound, euro, yen, and yuan. n International currency - international units of account (see "Jamaican Monetary System"). n Regional currency is the joint currency of a group of countries. Nowadays, such a currency is the euro. n Eurocurrency is a currency transferred to accounts in foreign banks and used for settlements with all countries except the issuing country. Such currency leaves the control of the national government and is cheaper than foreign currency or domestic currency. The most commonly used euro currency is the US dollar, as well as the euro, pound, and yen. At the same time, the name Eurocurrency does not mean that they circulate on the European market; these can be the markets of any country. n 17

CURRENCY The concept of "convertibility" (reversibility) of currencies is very complex. In fact, it is formed on the global foreign exchange market under the influence of supply and demand. There are also formal restrictions. According to the definition of Article VIII of the IMF Charter, a currency is considered convertible if restrictions on current transactions are lifted (payments for foreign trade in goods and services, payments for repayment of loans and interest on them, transfers of profits on investments, remittances of a non-commercial nature). This regime was established by the majority of IMF members. But there are also restrictions on capital operations VIII Article of the IMF Charter: u preventing foreign capital from entering certain sectors of the economy; u requirement of mandatory repatriation of profits; u obligation to surrender or sell currency; u a ban on the purchase of foreign securities by residents. According to the IMF, there are 17 countries that have lifted restrictions on capital operations: USA, Canada, UK, Germany, Switzerland, Holland, New Zealand, Hong Kong, Japan, Singapore, Malaysia, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, United Arab Emirates. 18

CURRENCY Currently, a currency can actually have 3 statuses: Sample 2006. Closed (inconvertible currency) (North Korean won). It is a national currency that functions within one country, but is not exchangeable for other currencies. Closed currencies include the currencies of countries that establish restrictions and prohibitions on purchase/sale, import/export of currency, etc. The main reasons for closure are a shortage of currency, large external debt, and a balance of payments deficit. n Partially convertible currency. This currency retains restrictions both on types of transactions (capital) and for certain holders. This type of currency is not exchanged for all currencies, but only for some, and is used not in all, but in a number of international transactions. This group includes most of the world's currencies. n Freely convertible (hard currency). During the period of the gold standard, this was determined by the free exchange of gold. With the abolition of the gold standard, it is understood as the ability to be freely bought and sold, exchanged at the current exchange rate, and used to create reserves. Since 1978, in the new edition of the IMF Charter, the concept of “freely convertible currency” has been replaced by the concept of “freely usable currency”. At that time, the IMF “assigned” this “highest qualification category” to only 5 currencies - the US dollar, pound sterling, German mark, French franc and Japanese yen. Today the place of the mark and franc has been taken by the euro. n 19

EXCHANGE RATE – 1 n n Exchange rate is the price of a monetary unit of one country, expressed in a monetary unit (or its tenfold value) of another. Currency parity is the relationship between two currencies established by law; is the basis of the exchange rate, which usually deviates from parity. 21

FACTORS DETERMINING THE EXCHANGE RATE Factors influencing the exchange rate are divided into structural and market factors. Structural factors operate over a long period of time. These include: n the competitiveness of a given country’s goods on the world market; n the state of the country's balance of payments; n purchasing power of the national currency and inflation rates; n difference in interest rates between countries; n the nature of government regulation of the exchange rate; n degree of openness of the economy. Market factors - act in the short term. These include: n crises, wars, natural disasters; n political situation; n price dynamics for strategic goods (hydrocarbons, wheat, etc.) 22

Topic questions:

4. State regulation of the exchange rate. Devaluation and revaluation.

5. Balance of payments of the country.

Goals and objectives of studying the topic:

In the process of studying the topic, you will master the basic concepts of exchange rates and the main characteristics of the modern monetary system.

Objectives of studying the topic:

1. Formation of initial ideas about exchange rates, about the main characteristics of the modern currency system.

2. Analysis of the patterns of development of the world monetary system.

Objectives of studying the topic:

1. Determination of the structure of currency relations.

2. Formation of ideas about the types of exchange rates.

3. Analysis of the impact of exchange rates on the economy.

4. Determination of the main stages in the development of currency relations in the world economy.

As a result of studying the topic, you should know:

¨ methods of classifying currencies on various grounds;

¨ main stages in the development of currency relations in the world economy;

¨ advantages and disadvantages of various world and regional currency systems;

¨ types of exchange rates in the modern world economy;

¨ factors influencing exchange rates;

¨ methods of state and interstate regulation of currency relations;

¨ structure and methodology for calculating the country's balance of payments.

After studying this topic, you should be able to:

· analyze the structure of currency relations;

· calculate the dynamics of real exchange rates;

· assess the consequences of changes in exchange rates;

· assess the influence of various factors on the dynamics of changes in exchange rates;

· determine the structure and main items of the country's balance of payments;

By studying this topic, you will acquire skills

Ø Calculation of the dynamics of real exchange rates;

Ø Assessing the consequences of exchange rate fluctuations;

Ø Analysis of factors influencing exchange rates;

Ø Determining the state of the country's balance of payments;

Ø Analysis of currency relations in relation to macroeconomic indicators
.

When studying the topic, you need to focus on the following concepts:

Foreign currency;

International currency;

Nominal exchange rate;

Real exchange rate;

Fixed exchange rate;

Paris gold standard system;

Bretton Woods currency system of the gold dollar standard;

Jamaican monetary system of floating exchange rates;

EMS.

Question 1. The concept of the world monetary system. The evolution of the world monetary system. European monetary system and its features.

To study this issue you need:

You will find additional material in the books:

1. International economic relations: Textbook / Ed. prof. . – M., 2006. – P. 329-359.

2. Theor economics: Textbook. – St. Petersburg, 2002. – P. 92-107.

3. , Kulakov economics: Textbook. – M., 2004. – P. 332-351.

4. Kireyev economics. At 2 o'clock -H. II, chapter 1 – 3.

Follow these instructions when researching the issue:

Think, on what circumstances the evolution of currency systems may depend. What changes are taking place in the modern world monetary system?

Make a list the main features, advantages and disadvantages of each of the currency systems discussed in the manual. What reasons in each specific case led to the abandonment of the old and the emergence of a new currency system?

Formulate What are the main features of the European Monetary System? How much more stable is it, in your opinion, than the Jamaican one?

What methods of fixing exchange rates are adopted in the Jamaican currency system?

Theoretical material on the issue.

§ 1. The concept of the world monetary system. Evolution of the world monetary system. European monetary system and its features.

1.1. World monetary system.

World monetary system represents the policy and practice of using various tools and methods by which international monetary and settlement relations are carried out.

The history of the world monetary system includes the Paris Monetary System (gold standard system), the Bretton Woods monetary system of fixed exchange rates, and the Jamaican monetary system of floating exchange rates. Nowadays there is also a regional currency system - the European one, which has a number of features.

The main elements of the international (world) monetary system are:

2) gold circulates freely, which meant:

d) import and export of gold are not limited in any way;

3) the rates of national currencies are strictly fixed to gold and through it to each other.

Gold, despite all the attractiveness of using it as a world currency, had a significant drawback - it was bulky and inflexible in its use as a means of circulation. Therefore, within the system, the main role of the means of payment began to be played by bills of exchange (drafts), expressed in the most stable currency of those years - the pound sterling. Gold was used mainly to pay for the state tax of those countries that had a passive balance of payments. In the 1870s France and Germany switched to the gold standard; in 1897, the Russian Empire joined the gold standard club. By the beginning of the twentieth century. most leading countries, excluding China, became participants in the system.

Within the framework of the Paris Monetary System it is possible to distinguish several subsystems:

¨ gold coin standard (before the beginning of the twentieth century), during which gold coins were minted, their free exchange for banknotes, import and export of gold was practiced;

¨ gold bullion standard (before the start of the First World War), in which gold bullion was circulated only in payments between countries. The reason for the transition was the Anglo-Boer War, the US-Mexico War, the Russian-Japanese War;

¨ gold exchange standard (or Genoese monetary system ), in which the currencies of leading countries were used along with gold. The gold exchange standard was in effect until the end of the 30s.

The gold standard system well ensured the stability of monetary circulation and automatic adjustment of the balance of payments under the conditions of the market mechanism.

However, during the First World War, rising inflation and a decrease in gold reserves in a number of countries significantly undermined the capabilities of the gold standard. The gold standard mechanism ceased to operate in all countries, excluding the USA and Japan. The main reasons for the destruction of the foundations of the system were:

A very large issue of paper money, not backed by warring countries, to cover military expenses;

Introduction of currency restrictions by the warring countries;

Depletion of gold resources by almost all countries except the United States.

At the Genoa Conference in 1922 a decision was made to transition to a gold exchange system. Its essence is that in 30 participating countries, along with gold, mottos were used for international payments - means of payment in foreign currency, i.e. national currencies began to play the role of international payment and reserve means. At the same time, only the dollar, pound sterling and French franc had real gold backing. The exchange of banknotes for gold (in payments between countries) could be carried out both directly and indirectly, through the currencies of the countries participating in the system. In other words, national money could be backed not so much by gold as by the foreign currency of the above countries, which retained the free exchange of their monetary units for gold. Countries that had become significantly poorer during the war now had a way to make international payments, and the United States became even richer. Although the reserve currency status was not officially assigned to any currency at that time, the US dollar and the British pound sterling really played a decisive role. Soviet Russia also participated in the Genoa Conference, however, due to its refusal to pay pre-revolutionary debts, it did not become a participant in the system.

During the Great Depression, which began in 1929, a decline in production and high inflation bled the gold standard system dry.

The crisis expressed itself:

¨ In sharp capital flows, and, as a consequence, in disequilibrium of balances of payments and fluctuations in exchange rates.

3. The system could only operate in conditions when the country was producing gold. The outflow of gold and the lack of its own deposits led to the country falling out of the gold standard system. On the other hand, the discovery of new deposits and an increase in its production caused transnational inflation.

4. The inflexibility of gold as a medium of exchange.

1.3. Bretton Woods monetary system of fixed exchange rates (gold dollar standard).

The decision to create a new monetary system was made at the UN International Monetary and Financial Conference in July 1944 in Bretton Woods, New Hampshire, USA. Representatives of the countries participated. The USSR participated in the conference, which, however, refused to become a member of the new system.

The Bretton Woods conference was based on the realities of the ending World War II. During its course, the United States was not only included in the short list of winning countries, but also possessed 70% of the world's gold reserves (24.4 billion out of 32.5 billion dollars, excluding the USSR), having become incredibly rich during the war years. In July 1945, US President Harry Truman signed the Bretton Woods agreements, which provided for the creation of the International Monetary Fund. Its members were required to set the nominal value of their currency in dollars or gold.

The main principles of the Bretton Woods system were:

1. The basis of the system was gold, but the only currency that had a gold content was the US dollar. Other currencies were equated to the dollar, and through it to gold. The gold content of the dollar was established - $ 35 = 1 troy ounce = 31.1 g. Thus, the national currency - the US dollar - became the world reserve currency, the main means of international payments. Within the British Empire, the pound sterling played the same role. Other countries preferred to keep reserves in foreign currency rather than in gold, which was more convenient for international payments.

2. Exchange rates were fixed and firm; the central banks of countries maintained a stable exchange rate of their currencies against the dollar through foreign exchange interventions within ±1%. This range of fluctuations depended on the demand and supply of currency on the world market. During the period the range was ±2.25%.

3. At the same time, exchange rates could now be changed more widely, within 10%, through devaluation and revaluation, which were excluded under the gold standard system (changes in the exchange rate over 10% required the consent of the International Monetary Fund). Such “one-time” adjustments (± 10%) were allowed only in case of “fundamental disequilibrium in the balance of payments,” but this term was never clearly defined.

4. The International Monetary Fund and the International Bank for Reconstruction and Development became important parts of the new system. The IMF, in particular, was created to provide loans to member countries to cover balance of payments deficits, develop recommendations for improving finances, and monitor compliance with currency parities and the principles of the Bretton Woods system itself.

Until about the second half of the 60s. The Bretton Woods system functioned very successfully, ensuring the post-war restoration and development of the economies of Europe, Japan, the USA and a number of other countries. However, by the end of the 60s. and this system was subject to crisis phenomena, which led to its collapse.

The main reasons for the collapse of the Bretton Woods system were:

1. Maintaining fixed exchange rates required countries to pursue a single economic policy, which turned out to be impossible due to the difference in the development goals of each country.

2. Increased inflation rates, which varied in different countries, had a significant impact on the dynamics of exchange rates.

3. The inconsistency of the principles of the Bretton Woods system with the new realities that emerged in the 60s. The system was built on the principle of American-centrism, while new centers – Western Europe and Japan – were successfully formed, and interstate contradictions intensified. In addition, the system was not designed for the emergence of a large number of developing countries in the world economy, freed from colonial dependence. The value of the dollar relative to other currencies, due to the excess supply of dollars, would inevitably fall, but under conditions of fixed rates, the IMF ordered the central banks of countries to buy the excess supply of dollars. The Bank of England was forced to sell pounds in order to buy “extra” dollars from the market.

4. The “reserve currency paradox,” which consists in the fact that a large market for Eurodollars, or “dollars without a homeland,” has gradually formed. In order for the national currency of a country to become a reserve currency, it must be available to other countries, which is only possible if the balance of payments of the issuing country is in deficit, i.e. it prints money for other countries. The world market was flooded with “dollars without a homeland,” which seemed to live their own independent lives, never returning to the United States. At the same time, the system could only function if the US gold reserves were sufficient to exchange all dollars presented by all foreign banks for gold. However, the excessive amount of dollars abroad, the deficit of their balance of payments, the movement of significant masses of dollars between countries in the 70s. caused doubts about the reliability of the dollar and flight from it. Countries that hold reserve currency seek to exchange it for gold. The Vietnam War and the active emission of US money increased the discrepancy between the gold reserves and the number of dollars in the world.

5. The active role of TNCs in the development of the currency crisis. TNCs concentrated 40% of industrial production, 60% of foreign trade, 80% of the developed technology of the West. Large foreign exchange assets and the scale of Eurocurrency, especially Eurodollar, operations of TNCs gave the crisis of the Bretton Woods system enormous scope and depth.

Since the late 60s. The Bretton Woods system gradually began to collapse, and 6 currency zones were formed. For example, 6 countries of the Common Market abolished the external limits of agreed fluctuations in the exchange rates of their currencies (“tunnel”) to the dollar and other currencies. The decoupling of the “European currency snake” from the dollar led to the emergence of a kind of currency zone led by the German mark. This indicated the formation of a Western European zone of monetary stability as opposed to the unstable dollar, which accelerated the collapse of the Bretton Woods system.

In 1971-72 emergency measures were taken to save the dollar: the exchange of dollars for gold for foreign central banks (“gold embargo”) was stopped, and the dollar was devalued ($ 38 per troy ounce). At the end of 1971, 96 of the 118 IMF member countries had established new exchange rates against the dollar, with 50 currencies appreciating to varying degrees. Taking into account the varying degrees of appreciation of the currencies of other countries and their share in US foreign trade, the weighted average value of the dollar devaluation was 10-12%.

In February 1973, the dollar was devalued again by 10% and the official price of gold was increased by 11.1% (from 38 to 42.22 dollars per ounce). The massive sale of dollars led to the closure of leading foreign exchange markets.

These contradictions led to the collapse of the Bretton Woods system.

1.4. Jamaican currency system of floating exchange rates.

The new monetary system was created in 1976 at an IMF conference in Kingston (Jamaica).

The main principles of the new currency system were:

1. The connection with gold has been legally eliminated - no currency has a gold content and is not exchangeable for gold. The country independently chooses the exchange rate regime, but it is prohibited from doing this through gold. However, in fact, such a connection remains, since central banks hold a significant part of their reserves in gold. In turn, the IMF returned 777.6 tons of gold to the old members of the fund in exchange for their national currencies at a price of 35 units. SDR for 1 troy ounce. The same amount of gold was sold to the IMF at open auctions in 1976–1980.

2. The new system has become polycentric, that is, based not on one, but on many currencies. Practice has shown that the national currency is imperfect in the role of a reserve currency, so it is advisable to replace it with a collective one. The role of such currencies has been SDR – Special Drawing Rights , Special Drawing Rights (SDR) and ECU – European Currency Unit (ECU).

SDR– a special accounting unit, “virtual” money, fiat currency, existing in the form of entries in accounts with the IMF, was created in 1968, began to operate in 1970. At the very beginning, the SDR rate was calculated according to the gold parity - 1 SDR = 0, 888671 gr. gold. Then, since 1974, the SDR rate was calculated based on the rates of 16 leading currencies, then (since 1981) according to a simplified basket - the US dollar (share - 42%), Japanese yen (13%), pound sterling, French franc, German brands (45%). Currently, the dollar, pound sterling, yen and euro take part in the formation of the basket of currencies. The proportions of their participation in the basket are periodically revised by the IMF (see table 34.).

Table 34

Composition of the SDR “basket”, in %

The weight of currencies is determined by the following indicators:

© the country’s share in world exports of goods and services;

© use of the country's currency as a reserve currency by various countries.

Economists in many countries believe that the SDR can be viewed less as a reserve currency and more as a loan. The general consensus is that they are both. As one of its creators wittily put it, SDRs are like a zebra - "an animal that may be considered by some as white with black stripes, and by others as black with white stripes."

However, due to difficulties with calculations, SDR did not gain the popularity that its creators expected, and the share of this conventional currency does not exceed 5% of the world foreign exchange market. 1 SDR is approximately 1.2 US dollars.

ECU was created in the EEC (now the European Union) in 1979 as the currency unit of the European Monetary System. It also existed in the form of entries in accounts at the European Monetary Institute. 1 ECU was equal to 1.3 US dollars. Since 1999, the ECU has replaced the euro (in non-cash form, since 2002 - in cash).

3. In the Jamaican currency system there are no limits to fluctuations in exchange rates, which are formed under the influence of supply and demand. However, the central banks of countries have a significant influence on exchange rate fluctuations by buying and selling currencies (foreign exchange interventions) and thereby contribute to the stabilization of exchange rates. Since fully floating exchange rates have a negative aspect, expressed in increasing uncertainty and unpredictability, attempts have been made and are being made to limit exchange rate fluctuations at least on a regional scale. Thus, in the countries of the EEC (EU), until 1993, exchange rate fluctuations were limited to ± 2.25%, which gave Europe stability for 6 years.

4. The role of the IMF, an institution that was created for a different monetary system, but managed to survive it, has increased. IMF member countries should not receive unilateral advantages and should not allow exchange rates to fluctuate too much.

5. In fact, the dollar retained its position as a reserve currency. Since the time of the Bretton Woods system, significant reserves of gold have been preserved both by the governments of many countries and by individuals and legal entities. In the 70s The preservation of the dollar's position was facilitated by the fact that when oil prices rose, payments for it were carried out in dollars. In the 80s The dollar's growth was facilitated by rising interest rates in the United States.

6. Within the framework of the Jamaican Monetary System, several exchange rate systems have developed.

1). Fixed exchange rates

A). The exchange rate of the national currency is fixed in relation to one voluntarily chosen currency and automatically changes in the same proportions as the base rate. As a rule, exchange rates are fixed to the US dollar, pound sterling, and euro. This often leads to the fact that foreign currency is circulated in the country as the second national (or even the first) - Argentina, Bolivia, Peru, Romania, countries of the former USSR.

20 countries have pegged their currencies to the US dollar: Argentina, Syria, Panama, Turkmenistan, Venezuela, Nigeria, Oman, etc.

To the euro - 14 countries - Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, Togo, Gabon, Cameroon, Congo, Central African Republic, Chad, Equatorial Guinea.

Other currencies include 10 countries, Namibia, Lesotho (South African rand), Tajikistan (Russian ruble), etc.

b). The national currency exchange rate is fixed to the SDR. 4 countries have such a link: Libya, Myanmar, Rwanda, Seychelles.

V). The exchange rate of the national currency is fixed in relation to a “basket” of voluntarily selected currencies. As a rule, the basket includes the currencies of countries that are the main trading partners of a given country. 20 countries have such an exchange rate - Cyprus, Iceland, Kuwait, Czech Republic, Bangladesh, Hungary, Morocco, Thailand, etc.

G). The national currency exchange rate is set on the basis of a sliding parity. First, a fixed exchange rate is established in relation to the base currency of another country (or countries), but this rate does not change automatically, but is calculated using a certain formula taking into account the dynamics of price growth rates. 18 countries have such a course (Tunisia, Vietnam, Sri Lanka, etc.)

Fixed exchange rates in the modern world economy are typical for developing countries that carry out this fixation in relation to the strongest currency.

2). Free swimming. The leading currencies are freely floating - the USA, Great Britain, Switzerland, Japan, Canada, Greece, Israel, South Africa and some others. However, with sharp fluctuations in exchange rates, central banks and the Federal Reserve maintain the rates of their currencies, and this “free” float is in fact a controlled float ( dirty float ). So, for example, in 2000 - 2003. The Fed has cut interest rates several times to stimulate economic growth in the United States.

3). Mixed or group swimming. Such group swimming was typical for the member countries of the EEC (EU) and to some extent continues today, after the introduction of a new common currency - the euro - in 12 countries. Before the introduction of the euro, two exchange rates were used in cash - internal, for transactions within the Community, and external, for transactions with other countries. OPEC countries established a special exchange rate regime, linking their national currencies to the price of oil. In the future, the introduction of an Arab (oil) currency, following the example of the euro, and another currency, the Afro, are visible, the prospects of which are seen in 8 countries of West Africa.

In 1988, 58 countries decided to set the exchange rate of their currencies in relation to the currency of one of their main partners: the American dollar (39), the French franc (14 franc zone countries) or other currencies (5). Other countries pegged their currencies to the SDR (17) or to another basket of currencies (29); in addition, 4 countries spoke in favor of a regime of limited flexibility in relation to a single currency and established mechanisms for currency cooperation, stabilizing their exchange rates. 19 countries spoke in favor of an independent navigation regime, including the USA, Canada, Great Britain, and Japan.

According to the IMF, in 1999, 43.57% of countries used freely floating exchange rates, 22.14% - fixed, 34.29% - mixed.

The Jamaican monetary system contributed to expanding the scope of independence of domestic economic policy from the state of the balance of payments. It became possible to adapt the national economy to the world economic situation by adjusting the exchange rate. However, the Jamaican system also showed its instability, expressed in fluctuations in the dollar exchange rate.

1.5. EMS.

Given the instability of the Jamaican monetary system, member countries of the EEC (EU) decided in 1979 to create the European Monetary System (EMS), or European Monetary System , EMS ). Initially, the EMU included 6 leading European countries, then their number grew to 12.