找回密碼

想起密碼去登錄

綁定手機號

依據《網絡安全法》為保障您
相關功能的正常使用，賬號需綁定手機

密碼登錄

微信登錄

微信掃描二維碼登錄“幫考網”

還沒賬號？立即注冊

微信登錄

短信登錄
密碼登錄

登錄即代表同意《用戶協議》和《隱私政策》

還沒賬號？立即注冊

Currency Regimes– Fixed Parity and Target Zone

幫考網校2020-08-06 15:06:02

Fixed parity and target zone are two types of currency regimes that countries can adopt to manage their exchange rates.

Fixed parity regime involves setting a fixed exchange rate between the domestic currency and a foreign currency, typically the US dollar or the euro. The central bank intervenes in the foreign exchange market to maintain the fixed exchange rate by buying or selling domestic currency as necessary. This regime provides certainty and stability for international trade and investment, but it can also limit a country's ability to respond to economic shocks and can lead to imbalances in trade and capital flows.

Target zone regime involves setting a range of exchange rates within which the central bank allows the exchange rate to fluctuate. The central bank intervenes in the foreign exchange market to keep the exchange rate within the target zone by buying or selling domestic currency. This regime provides more flexibility than fixed parity, allowing the exchange rate to adjust to economic shocks and changes in market conditions. However, it can also be more difficult to maintain than fixed parity, as the central bank must constantly monitor and adjust its interventions to keep the exchange rate within the target zone.

Both fixed parity and target zone regimes require a high level of commitment from the central bank to maintain the exchange rate, and can be vulnerable to speculative attacks and capital flight. Ultimately, the choice of currency regime depends on a country's economic conditions and policy goals.