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The main difference between Jamaican monetary system from the Bretton woods:

1. Changed media world money.

2. A new monetary system allows both fixed and floating rates or a combination of both.

3. The presence of closed currency units

4. In the Jamaican currency system, the rights of the IMF exchange rate surveillance expanded.

Advantages

- No need for international management of exchange rates

- No need for frequent central bank intervention

- No need for elaborate capital flow restrictions

The essence of these principles is as follows:

SDR

Disadvantades

• the exchange rate should be economically justified;

• to intervene in order to smooth short-term significant chaotic currency fluctuations;

• to consider the interests of other countries during the interventions.

- Higher volatility

- Use of scarce resources to predict exchange rates

- Tendency to worsen existing problems

- Special Drawing Rights (SDR), which only exists in a non-cash form. IMF participants received a certain share in SDR pro rate to their percentage in total capital of the fund.

Conclusion

  • The Jamaica system provides the abolition of gold as an official international means of payment and a measure of value. The official price of gold has been abolished and demonetization of gold has begun, that is gold loses the function of money. Gold could be the national reserves, but all payments between the IMF and national monetary institutions are implemented only in SDR.

  • Despite the fact that the Jamaica monetary system has a number of negative aspects, its operation has a significant impact on accelerating the pace of development of industrialized countries and many developing countries in the direction of further socio-economic integration.

From then on, countries could choose pricing system for their national currencies:

Content

  • Jamaican Monetary system
  • Histoty
  • Special Drawing Rights
  • Difference between Jamaican monetary system from the Bretton woods
  • Advantages and disadvantages

  • Conclusion

- Free floating exchange Forex rates;

- Limited flexible fx rates, when fluctuation corridor is fixed against other currencies or basket of currencies;

- Fixed Forex exchange rates.

Jamaican monetary system

  • It is a floating exchange rate system. In which a currency's value is allowed to fluctuate in response to foreign-exchange market mechanisms.

JMS was established on January 1976 in Kingston city at the meeting of IMF participant countries.

History background

On August 15, 1971, the United States of America unilaterally declared of canceling direct convertibility of its national currency to gold. It totally changed the way money exchange rates were defined and finished an epoch of Bretton Woods agreement.

Jamaica international monetary system and problems of its reforming

Performed by:

Zunduijamts U.

Egereva E.

Moscow 2017

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