Chapter 2

The International Monetary System

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

  • Describe various monetary systems.

  • Discuss different exchange rate regimes and understand the IMF's classification of these regimes.

  • Trace the emergence of the euro.

  • Discuss the chronological developments in the exchange rates of the Indian rupee.

  • Highlight the implications of appreciation and depreciation of currency.

  • Understand the concepts of international liquidity and international reserves.

2.1 Introduction

A system, in general, is a group of elements that are integrated with the common purpose of achieving certain objective(s). The international monetary system consists of the laws, rules, monetary standards, instruments, ...

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