CHAPTER 2

The International Monetary System

CHAPTER OBJECTIVES

After studying this chapter, you should be able to:

  1. Describe various monetary systems.
  2. Understand different exchange rate regimes and their implications.
  3. Trace the origin of the euro.
  4. Discuss the chronological developments in the exchange rates of the Indian rupee.
  5. Highlight the implications of appreciation/revaluation and depreciation/devaluation of currency.
  6. Understand the concept of international liquidity.
  7. Discuss the concept of sterilization.

Introduction

A system, in general, is defined as 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, ...

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