ims part 3

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LOGO

Composition of the InternationalComposition of the InternationalReserve of the Philippines forReserve of the Philippines for

International PaymentsInternational Payments

Composition of the InternationalComposition of the InternationalReserve of the Philippines forReserve of the Philippines for

International PaymentsInternational Payments

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The internal Reserve of the Central Bank of the

Philippines may include the following assets:

GOLD

Assets in foreign currencies in the form of:

Documents & instruments of typescustomarily employed for the international

transfer of fund;

Demand & time deposits in Central Ban,

treasuries, and commercial banks abroad;

Foreign govt. securities, with maturities not

exceeding five years;

Foreign notes and coins

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Classification of Monetary Systems

1. Fixed rate of exchange monetarysystem

In this system, each country adopts a

certain monetary unit with, more or less,fixed par value, based generally upon its

gold content. This par value is made the

basis of its exchange rate with other

national standard momentary units, andthis announced exchange rate remains

stable or permanent for some time before it

is officially changed.

As classified by Exchange Rate Mechanism

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Classification of Monetary SystemsAs classified by Exchange Rate Mechanism

2. The Floating Rate of Exchange A country using the floating rate of

exchange for its monetary allows its money

to be traded in the money market at

exchange rates fixed by the daily forces of

demand and supply for such money. The

monetary unit is allowed to seek its own

price level.

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Classification of Monetary SystemsAs classified by Exchange Rate Mechanism

3. The Flexible Par Value System

The middle system between fully fixedrates of exchange and the free floating rate

of exchange.

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Classification of Economic Systems

1. The Free Market Systems

2. The Managed Economic Systems

3. The Planned Economic Systems

4. The mixed Economic Systems

5. The Internationally Managed Systems

According to Degree of Management

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Degrees of Management

1. Automatic Management

Process of management which is closely

guided, or even pre-determined by precise

and detailed rules laid down in advance, tothe effect that when such-and-such a

condition, qualitative, or quantitative, is

fulfilled, countries, (or the Fund) will do

such-and such a course of action.

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2. Presumptive Management

Process of management which such

precise and detailed rules will generally

apply, but there is provision of the IMF tomeet, and by an appropriate majority, to

decide to override the rules in particular

cases.

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3. Discretionary Management

Process of management which such the

fulfillment of the conditions leads simply to

a consultation and assessment in the IMF,

to be conducted in the light of the principles

involved.

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Classification of International Monetary Systems

1. One World Monetary Systems Seeks to establish a world monetary system

with international authority in all the main areas

of monetary matters.

2. Bloc Systems Allow the information and strengthening of the

one-world approach in the multifarious fields of

trade and money.

this is also the modern tendency of our times

As to Quality of Internationalism

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Gold Exchange

A system in which a country does not

redeem its money directly in gold, but in

drafts, or claims to foreign exchange,held in foreign countries under the gold

standard.

A gold fund must be maintained bygovernment to maintain the gold

exchange standards.

Gold Exchange Standards in General

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Three Ways Government to Secure Gold Fund:

1. Borrow in the gold standard country

2. Purchase In its own markets securities of

that country, which it can then sell in thegold standard country, and deposit the

proceeds in the gold standard country

3. Purchase in its own money markets draftsdrawn upon the gold standard fund arising

out of its own exports

Gold Exchange Standards in General

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1. It is cheaper to operate than the gold

standard.

2. The gold standard fund deposited in the

foreign country earns interest, if it is in theform of securities payable in gold.

3. It involves no security risks, and expenses

as would be the case when a stock of gold

is held as reserve.

Advantages of the Gold Exchange Standard

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The chief drawback of the gold

exchange standard is that the value

of the countrys own monetarystandard depends upon the monetary

policies of the gold standard country.

Disadvantage of the Gold Exchange Standard

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