exchange rate fluctuation and manages appropriate level of exchange rate through an active intervention of government.
• Free or Independently floating
The best elastic exchange rate system in which exchange rate is decided freely depending on the principle of supply and demand in foreignexchange market.
To ease a sudden change of exchange rate, government intervenes in market restricti
foreign capital inflow.
• Creates BP surplus and upward pressure on currency.
Central bank intervenes in the foreignexchange market.
• Buys excess foreign currency.
Increases foreignexchange reserves.
• Sells domestic currency.
Increases the domestic money supply.
• That is, non-sterilized intervention.
LM curve shifts
intervention, the imposition of capital controls, and, indirectly, quantitative easing. While many countries have experienced undesirable upward pressure on their exchange rates and taken part in the on-going arguments, the most notable dimension has been the rhetorical conflict between the United States and China over the valuation of the Yuan. This which began in the early 21st century is being
I. Environment Analysis
Introduction
Lately, South Korea's cosmetic companies are actively entering Japanese market. In particular, low-priced brand companies entering are remarkable. Continuing the long-term recession, Japanese consumers find inexpensive cosmetics. Through this period, cosmetics of South Korea draw popular through low price and good quality. Celebrity publicity is also inf
Market : Money Supply ↑→ Currency↓
c. Government Policy : Interest Rate ↑→ Currency↑
Japanese Yen surged by 4.6% to 80 yen per dollar just within minutes on Wednesday in practice and it was the biggest move in history
Insurance companies and many other Japanese Companies withdrew their foreign investments and exchanged them for Yen
in order to cover insurance and rest