Please enable JavaScript.
Coggle requires JavaScript to display documents.
Exchange Rate Policy (ER Systems (Managed-Floating
Features of floating…
Exchange Rate Policy
ER Systems
Floating
ER determined freely by market forces of D&S in foreign exchange market, no gov. intervention
Fixed
Gov. fixes official P of currency in terms of foreign currency, committed to maintain fixed ER by buying/selling its currency in foreign exchange market using reserves to exactly offset changes in D&S
Devalue/Revalue: lower/raise fixed ER
Managed-Floating
Features of floating ER with occasional intervention by Central Bank to moderate undue short-term fluctuations
Band for fluctuation is undisclosed
ER set between US$0.80 and US$0.70
:arrow_up:D for S$ makes it rise to point B above upper limit
MAS intervenes by selling S$, S:arrow_up: from S1 to S2, external value brought to point C within band
-