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Business & Marketing Essay: Currency report

Essay Instructions:

Currency report
Introduction due on OCTOBER 12.
What currency do you want to analyze?
Why you have chosen that currency?: personal interest? personal interest? Financial interest?
What is the time frame: Months, years, Weeks?
That is the time covered: At least 20 years of data
Web page you are getting the data from: See announcement with different web pages
Present the graph to identify possible difficulties
* Analysis: Due TBA
You have to analyze the standing of your chosen currency making sure your elaborate your analysis referring to the following questions:
QUESTION 1. Research the history of your currency to Identify and explain any currency conflicts and currency war, and which were the policy options used to deter the currency conflict (Bergsten and Gagnon)
AS A SUMMARY: please remember we have covered three currency conflicts. All three shared the same path of events:
a background that lead to a currency conflict:
Devaluation or non-appreciation due to a number/series of historical, political and economics situation and cirsncunstances
Government officials that complain and take to solve the currency conflict
How they tried to solve this: which measures were used to solve the currency conflict?
CWI: Monetary policies
CWII: trade policies
CWII: on the making
Was there a currency war despite the efforts?
What was the final outcome?
NOW: Based on this information: QUESTION 1: Was/is your currency part of any of the currency wars (Richards)? If so, please identify dates, reasons, political and economic debates, outcomes.
Please explain if your currency/country engaged in any currency conflict
Was it a competitive devaluation or a non-appreciation of the value?
Time period
percentage
Effects on the economy of both countries: employment/unemployment, trade balance, inflation.
who/government official in charge of solving the issue?
Which policies were used? Fiscal, monetary, trade, unilateraly, multilateraly
How long did it last?
Any agreements signed? how was this conflic/wart solved?
What do you think about the handeling of the currency conflict/war? what would you have done differently?
QUESTION 2: Is your currency consider an international currency? (Cohen chapter 1 and Cohen Chapter 4)
a. Referring to Cohen Chapter 1 and chapter 4 please answer these question:
what is an International currency? Please use the readings to define it.
What are the motivation to become international? please use the readings to explain it
How is the internalization process? please refer to the readings
How does the Gresham's law applies? please refer to the readings
What are the Political and economic factors that help with the internalization process? Please refer to the readings
b. IS YOUR currency an international currency?
If Yes: Explain why
If No: Explain why and identify the reason/s why your currency is not considered an international currency
Non-full currency body, inconvertible, appeal? please explain
QUESTIONS 1: DUE ON NOV 2.
QUESTION 2: Due NOV 9
QUESTION 3. How is your currency financing international trade? ( Cohen Chapter 4 and Eichengreen et al. chatper ....)
QUESTION 4. How/what is the status of your currency as a reserve currency? (Cohen Chapter 4 & Eichengreen et al. chapters....)
* Conclusions and Final words
Please present your thoughts on how do you think has been the handling of the currency crisis and/or war and what would you have done differently and why.
* Work Cited
This is a research paper and, in order to avoid plagiarism, please make sure you cite your sources both in-text and in the bibliography.
Do the question 1 only and the q1 due on nov 11

Essay Sample Content Preview:

Currency Report
Author's Name
The Institutional Affiliation
Course Number and Name
Instructor Name
Assignment Due Date
Currency Report
Summary
The currency war that lasted from 2009-2011 was an important economic event that shaped the present-day global economies. The primary tussle was between China and the US, both superpowers (Bergsten & J E, 2017). The undervalued RMB launched a series of events that are still affecting trade between these two nations. An artificial exchange rate valuation can temporarily benefit an economy, but this act has long-term consequences that a country must evaluate before practicing such a policy. There is no doubt that China increased its domestic activity significantly by intervening in the exchange rates, but it must also be considered that people involved in the import business in China also suffered. The negotiation led by the IMF failed miserably as no decision was made as the debates reached an impasse. China and the US both depend on each other in imports and exports. China's compulsive devaluation can lead to drastic consequences in trade and other aspects because the US remains at the top of the financial world.
Background
China has been a part of a currency war with the US from 2009-2011. China's exchange rate policy had been the topic of a significant debate between analysts and the International Monetary Fund (IMF).
Competitive Devaluation
I choose this currency because it greatly impacted the decisions that the US made regarding its exchange rate policy. Furthermore, other countries with emerging market economics like Asia and Latin America had to suffer significantly because of this compulsive devaluation (Murphy and Yuan, 2009). Compulsive devaluation means that different countries lower the value of their currencies to promote their domestic currency. This artificial devaluation results in an increased amount of exports and the imports decrease drastically. The time frame that I will cover in this assignment is three years, which is from 2009-2011. Being a major superpower in the world, China benefited significantly from the devaluation of its currency. The country's economy thrives on the export of goods. Since China devalued its currency, the Asian market giants had to lower the cost of their exports to gain a competitive market advantage (Bhalla and Qiu, 2004). A lower currency value made the cost of imports higher, which ultimately resulted in people buying country made products that boosted the domestic industry ("Dollar Yuan exchange rate - 35-year historical chart," n.d.)
.
(Macrotrends, 2020)
The Chinese Yen Currency War
Before 1994, China had adopted a more stable currency policy. It implemented a dual exchange rate strategy, which meant that the Chinese markets' imports and exports would determine the exchange rate (Huang & Wang, 2004). The foreign exchange was kept restricted in order to limit imports. As a result, this caused the extensive use of black market foreign exchange services exploiting individuals. Before 2009, the two exchange rates used were an unpopular move, which was criticized by many countries. In 1993, the official exchange rate was 7.77 Yuan per dollar, and the artificial rate in the swap market w...
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