Arab Monetary: 3 currency exchange systems and countries 'cooperation' dependent mech
Confirmed the Arab Monetary Fund, the drainage systems prevailing in the global economies and Arab currencies, including 3 types first "floating fully" and that left to market forces by identifying currency exchange rate, as countries rely other system "peg a single currency or a basket of currencies" including states "cooperation", Jordan and Lebanon, as well as drainage systems combine the two systems ex. said Dr. Ibrahim Alkrasna head of training in the Fund during the "financial stability", which concluded yesterday at the Fund in Abu Dhabi "are diverse exchange in the Arab countries to 3 types ", pointing out that both of Jordan, Lebanon and the GCC countries peg its currency to fixed exchange rates against the dollar." he added, linking Libya and Syria their currencies unit SDRs, while Morocco linking exchange rate DRAM basket undeclared currency, where the Euro weight largest in the basket and determined central bank exchange rate Moroccan dirham daily, and selecting the minimum and maximum exchange rate of the dirham. explained that linking to a basket of currencies are choosing linkage system to a basket of currencies available, such as special drawing rights and baskets of other currencies, which is based usually currencies most important trading partners of the state. added Alkrasna adopt all of Iraq, Tunisia, Algeria, Mauritania and Sudan system "floating orbit of exchange", where value is determined currency in the market, according to the forces of supply and demand, and the government to intervene when necessary to re-route the exchange rate, in line with a group of standards including the status of the current account and foreign currency reserves, while dependent both Egypt and Yemen system floating exchange. pointed out that "free-floating" leaves the exchange rate freedom change continuously over time, consistent with market forces, and limited interference by the authorities in this case to influence The pace of change in the exchange rate only, and not to limit that change. said Alkrasna "refers literature on systems exchange rate that there impact of exchange rates on economic growth and have that influence either directly through the affected exchange rate or indirect impact of the exchange rate on each of the investment and trade and financial sector development. " indicate the economic theory that the effectiveness of countries to deal with the trade shocks depends primarily on the drainage system adopted in these countries, which in turn is reflected in the country's economic growth. "In case prices fall exports State, the reflection that economic growth depends on the exchange rate regime, whether fixed or floating, pointing out that the low price of exports will reduce state revenues, which will lead to a decline in economic activity, as well as in employment. " and "In the case of the adoption of the state rate system fixed exchange it requires the state to intervene to keep the exchange rate of the local currency by starting to buy the local currency, will reduce the availability of these currency, to grant facilities and investments, which will negatively impact on economic growth. " and stated that in the event of the adoption of the state to a flexible exchange rate or floating, The State is committed to intervene to raise the exchange rate results in a lack of foreign currency and lead to a further decline in the price of the local currency which will reflect positively on exports and thus an increase in economic growth. explained that the impact of the exchange rate regime based on the level of sophistication in financial markets, Since the flexible exchange rate is usually coupled with fluctuations high and that could have a negative impact on the economy unless the financial system is able to absorb shock and provide dealers with tools hedge occasion, so thought it must be a system developed financial if take advantage of the price flexible exchange.