第04章外汇市场讲义简易版.docx

第04章外汇市场讲义简易版.docx

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第04章外汇市场讲义简易版

Section4.1Text

⏹MeaningsofForeignExchange

Theterm“foreignexchange”hasthreeprincipalmeanings.Inthefirstplace,itmeansthesystemutilizedinfinancinginternationalpayments.Oritmayrefertothesubjectwhichisstudiedtoobtainknowledgeastothefinancialoperationsconductedtodischargeinternationalobligations.

Inthesecondplace,itmeansthemediausedtodischargeinternationalobligations.Forthepurposeofinternationalfinanceandexchange,theprincipalkindsofmediaaretelegraphictransfers,mailtransfers,bills,demanddrafts,cheques,banker’sdrafts,foreignbonds,coupons,dividendchecks,pensionchecks,commercialandpersonallettersofcredit,traveller’scheques,foreignnotesandcoins,etc..

Thethirdmeaningoftheterm“foreignexchange”isthatitcovers,inageneralway,theratesatwhichforeignexchangeisquoted.

Themethodofquotingthepricesorratesofexchangefordifferentcurrenciestakesoneoftwoforms,thedirectquotationmethodandtheindirectquotationmethod.Underthedirectquotationmethod,theratesarequotedintermsofavariablenumberofhomecurrencyperfixedforeigncurrencyunit,andChinaadoptsthismethod.Undertheindirectquotationmethod,theunitstothefixedunitofhomecurrency,theexchangemarketinLondonpracticesthismethod.

⏹FinancialDerivatives

SpotTransaction

Spottransactionmeanstheactualandvariableamountofthecurrencyofonecountrywhichatanygiventime,canbeboughtforafixedsuminthecurrencyofanothercountry.Itisatermmeaningthatthesetransactionsaresettledthesecondworkingdayfromthedateofthedeal.

ForwardOperations

Foreignexchangecanbeboughtandsoldnotonlyonaspotorcashbasis,butalsoonaforwardbasis（fordeliveryonastipulatedfuturedate）.Theoretically,theforwardpriceforacurrencycanbeidenticalwiththespotprice.Almostalways,however,theforwardpriceinpracticeiseitherhigher（premium）orlower（discount）thanthespotprice.

Swaps

Itcontainstwosimultaneousinseparablecontract-deals,thefirstforspotdelivery,andthesecond（thecontraryofspot）forfuturedelivery（inthiscaseyourpositionissquared）.

Or,inotherwords:

thesimultaneouspurchaseandsaleofidenticalamountsofacurrencyfordifferentvaluedates.

Futures

Futuresareforwardtransactionswhicharetradedonexchanges,i.e.notOTC（over-the-counter）.Inordertobemarketableonexchanges,futuresarestandardizedintermsofquantity,settlementdatesandquotation.

CurrencyandInterestRateOptions

CallOption

Therighttobuyacertainamountofacurrencyatafixedrateatapre-arrangedexpirydate.

PutOption

Therighttosellacertainamountofacurrencyatafixedrate（strikeprice）atapre-arrangedexpirydate.

⏹ExchangeControl

Exchangecontrolmeansofficialcontrolintheforeignexchangedealingsofacountry.Thecontrolmayextendoverawidearea,coveringtheimportandexportofgoodsandservices,remittancesfromthecountry,inflowandoutflowofcapital,rateofexchange,methodofpayment,maintenanceofbalanceinforeigncenters,acquisitionandholdingofforeignsecurities,financialrelationshipbetweenresidentsandnon-residents.Exchangecontrolrestrictstherightofholdersofacurrencytoexchangeitforothercurrencies.Ittherebyrendersacurrencyinconvertible.

Section4.2SpecializedTerms

Exchangen.

foreignexchange

foreignexchangereserve

foreignexchangecontrol

Stateadministrationforforeignexchange

fixedexchangeratesystem

floatingexchangeratesystem

Chicagomercantileexchange

NewYorkMercantileExchange

LondonMetalExchange

IntheShenzhenStockExchange,earlyVCfirmsinthemedium-andsmall-sizedenterprisesarenotallowedtoexit,namelytoselltheirshares.

Hefurthernotedthattoencourageforeigndirectinvestment,ChinahadgrantednationaltreatmenttoFIEsinexchangeadministration.

WherecanIexchangemyAmericandollarsforforeignmoney?

Convertibleadj.

China’sforeignexchangereformisintendedtoputtheChineseYuangraduallyclosertobeingafreelyconvertiblecurrency

ThepurposeistofurthercompletetheexchangerateformationmechanismandsteadilyadvancetheprocessoftheconvertibilityoftheCNY.

Fluctuatev.

Theexternalriskmainlymeansfluctuationofinterestrateandexchangerate,inflationandpolicies.

Volatilityn.

Excessvolatilityanddisorderlymovementsinexchangeratesareundesirableforeconomicgrowth.

Discountn.

Wehaveadjustedourpriceandgiveyouaspecialdiscountof3percent.

handleallkindsofremittance,settlement,anddiscountofcommercialbills

ThediscountrateiswhatFederalReservechargesbankstoborrowmoney.

Optionn.

Calloption:

Optiontopurchasedesignatedsecuritiesatapredeterminedpricewithinaspecifiedtimelimit.

Thegovernmenthastwooptions:

toreducespendingortoincreasetaxes.

Dischargev.

freefromdebt/dischargeofadebt

Thegoodswillbesoldforafractionoftheirvalueinordertodischargethedebt.

Transferv.n.

Ashareholder'stransferofitssharesmustbecarriedoutthroughalegallyestablishedstockexchange.

股东转让其股份，必须在依法设立的证券交易场所进行。

Appreciatev.

Asthestockofforeigncurrencyaccumulates,speculationonanappreciationrises,makingitevermorecostlytoholdthecurrencydown.

AgainsttherapidexpansionofChina’sexport-orientedeconomyandthechangesinthebalanceofpaymentsonJuly1,2005,Chinaannounceda2.1%RMBappreciationagainstUSDandimplementedamanagedfloatingexchangerateregime,withtheaimtofurtherdevelopitssocialistmarketeconomyandgivefullplaytomarketforcesinresourceallocation.

Depreciationn.

Fixedassetsdepreciationrate

Thesepoliciesinclude:

favorabletaxpolicy,acceleratingdepreciationpolicyandinvestmenttaxcreditpolicy.

Inaddition,thedepreciationoftheJapaneseyenagainsttheUSdollaralsohelpedthegrowthofexports.

Speculatev.

Hewasruinedbyspeculation.

Hemadehismoneyinpropertyspeculation.

Heventuredhisfortuneinaspeculation.

Venturev.n.

Nothingventure,nothinghave.

Weexpecttoholdaminimumof50%oftheequityinthisjointventure,withatermof20years.

Asaresultofnegotiations,PartyBagreetoinvestus$1millioninthenewly-establishedjointventureandtakeashareof48%.

Futuresn.

commodityfutures

financialfutures

currencyfutures

ChinaFinancialFuturesExchange

ShanghaiFuturesExchange

CommodityFuturesTradingCommission

ChicagoBoardofTrade

FuturesaresortedinChinasuchascommodityfutures（includingagriculturalcommodities,metals,energyandchemicalproductsfutures）andfinancialfutures（includingforeignexchange,interestrate,stockindexandstockfutures）.

Afuturesexchangeorfuturesmarketisacentralfinancialexchangewherepeoplecantradestandardizedfuturescontracts;thatis,acontracttobuyspecificquantitiesofacommodityorfinancialinstrumentataspecifiedpricewithdeliverysetataspecifiedtimeinthefuture.

Deficitn.

eliminatefiscaldeficit

indentonreservestocoverthedeficit

They'rereadytocutthefederalbudgetdeficitforthenextfiscalyear.

Arbitragen.

Usingfuturesarbitragebetweenthespotmarketstoobtaintheexcessproceeds.

China'sstrictcapitalandinvestmentcontrolspreventarbitragebetweenthetwomarkets.

Swapn.v.

Commonexamplesofderivativesincludeswaps,options,futuresandFRAs.

（ForwardRateAgreementSwap远期利率协议的交换）

toswapthedebtsintoequity/debt-to-equityswap

Riskswithsomefinancialinstitutionhavebeenresolvedbymergers,acquisitions,debt-equityconversions,closuresandbankruptcies.

Hedgev.n.

Dealers,havingconcludedaforwardcontract,shouldalwayshedgewithanoffsettingcontract.

Futurestraderscanbegroupedintohedgersandspeculatorsbasedontheirpurposesofenteringthefuturesmarketorindividualinvestorsandinstitutionalinvestorsbaseonwhetherthetraderisanaturalpersonoralegalentity.

Balancen.

Off-balancesheet

On-balancesheet

Balancesheet

Balanceofpaymentsmeansasummaryrecordofacountry'snetinternationaleconomictransactions,includingtrade,services,capitalmovementsandunilateraltransfers.

Balancesheetisanaccountingstatementofacompany'sassetsandliabilities,providedforthebenefitofshareholdersandregulators.Itgivesasnapshot,ataspecificpointoftime,oftheassetsthatthecompanyholdsandhowtheassetshavebeenfinanced.

Section4.3SubjectTopic

TheAsianFinancialCrisis

A:

TheAsianfinancialcrisiswasthemostimportanteventin1997and1998.Iamveryinterestedinthisissue.Iwanttohaveadiscussionwithyouaboutthisevent.Tome,IthinktheoutbreakoftheAsianfinancialcrisisinJuly1997resultedfromtheinteractionamongvariousinternalandexternalfactorsinthosecountries

B:

Well,Iwouldsaythedeteriorationoftheireconomicsystemsisthefundamentalcausewhiletheattackfrominternationalspeculatorsspeditup.

A:

Ithinktheinappropriatepeggedexchangeratesystemplayedanegativeroleinthisevent.Itissuchpeggedexchangeratesystemsthattouchedoffthecrisis.Foralongtime,theSoutheastAsiancountrieshadfixedtheircurrencies’exchangerates.CompetitivenesshadbeenweakenedbecauseofcontinuousdeficitintheircurrentaccountswhiletheUSeconomyhasdevelopedsteadily.Undersuchconditions,tomaintainthepeggedexchangerateincreasedthepressureofdevaluationontheircurrenciesandmadethemvulnerabletoattackfrominternationalspeculation.

B:

Ithinkanotherreasonistheimbalanceof