April 12th, 2021 at 6:48 AM by admin

Expansionary monetary policy can be linked to either a relatively low interest rate or a relatively high interest rate. Incentives to harmonize monetary policy between current queues and queues are compared to each of these alternatives. Speculation under the queue is likely to be less problematic than under the spotted snake for the following reasons: (1) Reserves and money deliveries would not be affected. (2) Speculation would be riskier. (3) Reducing and eliminating the allowable fluctuation margin of the sustained exchange rate would not be limited. (1) In the case of a term snake, fixed-term exchange rates would be kept within the prescribed limits. Given the current strengths of futures markets, the greatest benefit for traders and capital distributors would likely be achieved if the life of sustained futures markets were three months.6 Terminatoratate limits would be maintained by requiring each country to place the forward interest rates of its currency against partner currencies such as the prices at which it sells its national currency. and floor rates as prices at which it will buy ahead of its national currency. Official futures contracts would only be concluded in weak and strong currencies, and intervention would be unlimited.

The authorities of strong currencies and weak currencies would intervene at the same time to maintain the limits of the snake, while the magnitude of the intervention that is generated by each would not necessarily be the same. Before a commercial payment is actually made, there are usually two types of delays: first, the search and negotiation period before the contract exchange and, second, the period between contract exchange and actual payment (which itself includes production and transport delay before delivery, and credit period after delivery). Compared to the spot line, the forward snake would generally reduce the currency risk associated with each of these two delays. First, the stability of futures exchange rates would reduce the risk of exchange rate changes during the research and trading period and thus reduce the risk that plans will be developed on the basis of erroneous price signals. Second, it is likely that formal support for a fixed-term futures price and not the spot price would increase the availability of futures facilities, thereby increasing the likelihood that long delays between contract exchange and potential futures payments will be covered; Regardless of the advance rate that has been sustained, it is likely that banks would be willing to use their ability to hedge the futures market to provide long-term facilities to their customers. In the absence of parity changes, losses on foreign exchange transactions under the forward snake would have been related to similar losses under the current snake. Below a coupled cash rate, excessive demand for foreign currencies in the futures market of banks that cover their open positions, i.e. through passive arbitrage on interest rates, is transferred to the sustained spot market.