An increase in the value of a domestic currency relative to foreign
currencies. An appreciation increases the purchasing power of
the domestic currency over foreign goods.
The difference between the value of
merchandise exports and the value of merchandise imports
for a nation. The balance
of trade is only one component of a nation's total balance of
payments.
A summary of all economic transactions between a
country and all other countries for a specific time
period-usually a year. The
balance of payments account reflects all payments and
liabilities to foreigners (debits) and all payment and
obligations (credits) received from foreigners.
The import-export balance of goods and services plus, net private and
government transfers. If a nation's export
of goods and services exceeds (is less than) the nation's
import of goods and services plus net unilateral transfers to
foreigners, a current account surplus (deficit) is present.
The record of all transactions with foreign nations that involve the
exchange of merchandise goods and services or unilateral gifts.
A reduction in the value of a domestic currency relative to foreign
currencies. A depreciation reduces the purchasing power of the
domestic currency over foreign goods.
An official act that changes the level of the "fixed" exchange
rate in a downward direction. In essence, it is a one-step
depreciation of a currency under a fixed exchange rate system.
The domestic price of one unit of foreign currency. For example, if it
takes $1.50 to purchase one English pound, the dollar-
pound exchange rate is 1.50.
An international monetary system in- which each country's currency is set
at a fixed rate relative to all other currencies and
governmental policies are used to maintain the fixed rate.
Exchange rates that are determined by the market forces of supply and
demand. They are sometimes called "floating exchange rates.
"
The market in which the currencies of different countries are bought and
sold.
An international banking organization, with more than 100 nation members,
designed to oversee the operation of the inter national monetary
system. Although it does not control the world supply of money
it does hold currency reserves for member nations and make
currency loans to national central banks.
Supplementary reserves, in the form of accounting
entries, established by the International Monetary Fund
(also called "paper gold"). Like gold and foreign
currency reserves, they can be used to make payments on
international accounts.
