Financial English 7.ppt

1、Chapter 7,Foreign Exchange Market when it falls in value ,it undergoes depreciation. Methods of Quotation Foreign exchange dealers quote two prices, one for selling, one for buying.,Defining Exchange Rate,Direct Quotation The exchange rates are quoted in terms of a variable number of home currency p

2、er fixed foreign currency unit. Indirect Quotation The exchange rates are quoted in terms of a variable number of foreign currency unit to the fixed unit of home currency,Continental European dealers normally quote via the direct method, including China. In London dealers use the indirect method. In

3、 USA, both quotation methods are used. When a bank is dealing with a customer within the U.S.,a direct quotation is given, but when dealing with other banks in Europe(except the UK),the indirect quotation is used.,Defining Exchange Rate,Bank A gives a quotation of EOR/USD as 1.0820/40. David wants t

4、o sell 5 million USD to Bank A for EOR, how much EOR David can obtain from Bank A? A Chinese company A wants to import a machine from a US company B. Company B offered two prices. One is 345,000 US dollars, another one is 2.8 million HK dollars. At that time, foreign exchange rate is USD/CNY 8.2740/

5、50 and HKD/CNY 1.0120/30. So which price should company A accept?,Basic Rate and Cross Rate Official Rate and Market Rate Bid Rate(Buying) and Offered Rate(Selling) Inter-bank Rate and Commercial Rate T/T(Telegraphic Transfer Rate) M/T(T/T(Mail Transfer Rate) D/D(Demand Draft) Spot Rate and Forward

6、Rate Nominal Rate and Real Rate,Why Are Exchange Rate Important?,Exchange rates are important because they affect the relative price of domestic and foreign goods. When a countrys currency appreciates(rises in value relative to other currencies), the countrys goods abroad become more expensive and f

7、oreign goods in that country become cheaper(holding domestic prices constant in the two countries).,How Is Foreign Exchange Traded?,Types of foreign exchange transactions Spot transactiona foreign exchange transaction to be settled on the second following business day 即期汇率也称现汇率，是交易双方达成外汇买卖协议后，在两个工作日

8、以内办理交割的汇率。 这一汇率一般就是现时外汇市场的汇率水平。即期汇率是由当场交货时货币的供求关系情况决定的。一般在外汇市场上挂牌的汇率，除特别标明远期汇率以外，一般指即期汇率。,Forward transactiona foreign exchange transaction agreed upon today but to be settled at some specified future date, often one, two or three months after the transaction date. 又称期汇交易，是指交易双方在成交后并不立即办理交割，而是事先约定币种

9、、金额、汇率、交割时间等交易条件，到期才进行实际交割的外汇交易。 汇交易交割期限一般有1个月、2个月、3个月、6个月、12个月。若期限再长则被称为超远期交易。远期外汇交易的作用是避险保值。,1 任何外汇交易都以即期交易为基础，所以远期交割日是以即期加月数或星期数。若远期合约是以天数计算，其天数以即期交割日后的日历日的天数作为基准，而非营业日。 2 远期交割日不是营业日，则顺延至下一个营业日。顺延后跨月份的则必须提前到当月的最后一个营业日为交割日。 3 双底惯例。假定即期交割日为当月的最后一个营业日，则远期交割日也是当月的最后一个营业日。,Option forward transactionth

10、e customers right to deliver or to take delivery of a specified sum in foreign currency at any time or times during an agreed period. 外汇择期交易是指由交易双方约定于未来某一段时期，依交易当时所约定的币别、汇率及金额可随时进行交割的交易活动。 外汇择期交易主要为一部分无法掌握确定的远期交割日的进出口商提供远期的汇率锁定服务，以帮助他们控制汇率风险。与远期外汇买卖相比，外汇择期交易为客户提供了较大的灵活度。,Swap transactionIn general,

11、it is the simultaneous purchase and sale of foreign exchange or securities, with the purchase being effected at one and the sale back to the same party to be carried out at a price agreed upon today but to be completed at a specified future date.,一家日本贸易公司向美国出口产品，收到货款500万美元。该公司需将货款兑换为日元用于国内支出。同时公司需从美

12、国进口原材料，并将于3个月后支付500万美元的货款。此时，公司可以采取以下措施：叙做一笔3个月美元兑日元掉期外汇买卖：即期卖出500万美元，买入相应的日元，3个月远期买入500万美元，卖出相应的日元。通过上述交易，公司可以轧平其中的资金缺口，达到规避风险的目的。,How Is Foreign Exchange Traded?,You cannot go to a centralized location to watch exchange rates being determined; currencies are not traded on exchanges such as the New

13、 York Stock Exchange. In stead, the foreign exchange market is organized as an over-the-counter market in which several hundred dealers stand ready to buy and sell deposits denominated in foreign currencies.,Exchange Rates in the Long Run,The starting point for understanding how exchange rates are d

14、etermined is a simple idea called the Law Of One Price. If two countries produce an identical good, the price of the good should be the same throughout the world no matter which country produces it. 一价定律认为在没有运输费用和官方贸易壁垒的自由竞争市场上，一件相同商品在不同国家出售，如果以同一种货币计价，其价格应是相等的。,Question,Recently, the yen price of J

15、apanese steel has increased by 10%(10,000 yen to 11,000 yen) relative to the dollar price of American steel (unchanged at 100 dollars). By what amount must be dollar increase or decrease in value for the law of one price to hold true?,Answer,For the law of one price to hold, the exchange rate must r

16、ise to 110 yen per dollar, which is a 10% appreciation of the dollar. The exchange rate rises to 110 yen so that the price of Japanese steel in dollars remains unchanged at $100 (=11,000 yen/110 yen per dollar). In other words, the 10% depreciation of the yen just offsets the 10% increase in the yen

17、 price of the Japanese steel.,按照一价定律的理论，任何一种商品在各国间的价值是一致的。（通过汇率折算之后的标价是一致的）若在各国间存在价格差异，则会发生商品国际贸易，直到价差被消除，贸易停止，这时达到商品市场的均衡状态。,第一次世界大战之后，资本主义各国（美国除外）相继废弃了金本位制，代之以不可兑现的纸币流通制，由于战时支出剧增，各国都靠扩大货币发行量进行弥补，形成了世界范围的通货膨胀。战后，各国开始重新寻求货币汇率的稳定，但由于各国的通货膨胀率不同，如何确定新的均衡汇率就成为恢复世界货币体系过程中的一大难题。 正是在这种情况下，瑞典经济学家古斯塔夫.卡塞尔提出，

18、一国应以国内外物价对比来作为决定汇率的依据，而新的均衡汇率则应在最初的均衡汇率的基础上，再根据两国相对通货膨胀率作出调整后得到。,Exchange Rates in the Long Run,One of the most prominent theories of how exchange rates are determined is the Theory Of Purchasing Power Parity. It states that exchange rates between any two countries will adjust to reflect changes in

19、the price levels of the two countries. It suggests that if one countrys price level rises relative to anothers, its currency should depreciate. PS: the PPP cannot fully explain exchange rates.,绝对购买力平价,一价定律是针对某一种商品，如果将单一商品推广到所有商品，就可以推导出绝对购买力平价。 绝对购买力平价认为两种货币之间的汇率应该等于两国货币在同样的一篮子商品上具有的购买力，那么它可以简写成S=PD/

20、PF，汇率应该等于两国价格水平之比。其中PD表示本国的价格水平，PF表示外国价格水平。根据这个公式，当本国价格水平相对上升时，本币购买力相对下降，则汇率S上升，本币贬值。,相对购买力平价,根据绝对购买力平价，我们可以推出相对购买力平价。推导的方法有两种： （1）取对数后差分；（2）基期和现期（0和t） 相对购买力平价模型形式如下：S=(St-St-1)/St-1=RD-RF RD和RF表示本国和外国第t期的通货膨胀率。根据相对购买力平价认为，汇率变化的百分比等于两国通货膨胀率的差异。如果本国的通货膨胀率比外国高，其货币应该贬值，反之本币应该升值。,三者区别,一价定律可以推导出绝对购买力平价，但

21、是两者具有明显区别：（1）分析对象不同。购买力平价是以汇率为分析对象，而一价定律主要是考察价格；（2）价格不同。购买力平价涉及的是一揽子物价水平，一价定律考虑的是一种商品的价格；（3）适应条件不同。绝对购买力平价的适应条件不如一价定律那么严格，绝对购买力平价并不要求每一种商品价格相等，也不要求两国完全取消贸易壁垒，只要各国对进口和出口的限制程度相同，则仍然成立。,三者区别,绝对购买力和相对购买力平价的区别是：（1）绝对购买力平价将价格水平和汇率水平联系起来，而相对购买力平价将价格变动与汇率变动联系起来。所以，绝对购买力平价说明某一时点上汇率的决定，而相对购买力平价说明一段时间内汇率的变动规律。

22、 （2）绝对购买力平价在计算两国物价水平时，要求所参照的商品篮子及其权重都相同，相对购买力平价没有这个限制，但是相对购买力平价要求基期存在绝对购买力平价，这种先决条件很难成立。,Influence of Foreign Exchange Rates,Balance of International Payments Inflation Interest Rate Economy Growth Rate Macroeconomic Policy Expectation,Influence of Foreign Exchange Rates,Trade Balance Non-trade Bala

23、nce Capital Flow Exchange Reserve Domestic Price Level Income and Employment,The Balance of International Payments,An accounting record of all transactions made by a country over a certain time period, comparing the amount of foreign currency taken in to the amount of domestic currency paid out.,The

24、 Balance of International Payments,The IMF definition: The balance of payments is a statistical statement that summarizes transactions between residents and nonresidents during a period.The balance of payments comprises the current account, the capital account, and the financial account. Together, t

25、hese accounts balance in the sense the sum of the entries is conceptually zero.,The Balance of International Payments,Differences between international payments and international credits Residents and Non-residents Transactions,The Balance of International Payments,Principles Each transaction is rec

26、orded in accordance with the principles of double-entry bookkeeping, meaning that the amount involved is entered on each of the two sides of the balance-of-payments accounts. Consequently, the sums of the two sides of the complete balance-of-payments accounts should always be the same, and in this sense the balance of payments always balances.,The Balance of International Payments,Balance of Payment Presentation Components The current account brings together transactions that involve currently produced goods and services. It is composed of exports and impo