• Foreign exchange shortage

    read:2023/2/25 2:12:28

    What forextradingaccountsregister forextradingaccountstype forex trading accounts shortage Foreign exchange shortage is the trend of foreign exchange supply is less than the demcashback forex for foreign exchange War, economic crisis, economic backwardness may lead to foreign exchange shortage Foreign exchange shortage of the original problem A country in the process of economic development, foreign exchange shortage is formed by a variety of reasons for this, each opinion, controversial International Monetary Fund (IMF) put monetary factors in the first place monetary factors are The monetarist school of thought, with the representative monetarist school of thought: foreign exchange shortage is mainly the countrys eagerness to develop the economy, excessive issuance of currency caused by its reasoning is as follows: in the long run, the demand for a countrys money stock is relatively stable, by a countrys economic scale and economic activities, such as the real national income and price level, and the supply of money is largely determined by the governments economic In the money supply formula MS=m(D+R), the supply of money MS is determined by the domestic supply component D, international reserves R and the money multiplier M. If the demand for money rises while D remains unchanged, it can only be met by an increase in international reserves R. At this point, the balance of payments is in surplus. Conversely, if the demand for money remains unchanged while D increases, the balance of payments is in deficit. The deficit and foreign exchange shortage is the same meaning, are reflected in the domestic money demand MD and domestic money supply D between a state of imbalance; since the money supply MS largely by the governments economic policy decision, money demand MD and relatively stable, the county foreign exchange shortage can only be for the development of the economy and excessive issuance of money caused by the monetarist school in the analysis of the causes of foreign shortage, there are two defects First, the concept of foreign exchange shortage is inaccurate, and foreign exchange balance is mixed with see the change in the quantity of money, and not anti-government foreign exchange shortage of the economic essence of the second, its theory is not universal, only applicable to technology, economic structure and labor productivity of developed countries with modern level, there is no potential demand for foreign exchange, foreign exchange shortage of foreign exchange balance deficit, but the developing countries have potential demand for foreign exchange. Foreign exchange shortage does not show the foreign exchange balance deficit, not monetary The fundamental reason for the shortage of foreign exchange in developing countries is the backwardness of their labor productivity, economic structure and technology, compared with developed countries, there is a considerable gap First of all, the backward economic structure, technology, labor productivity, etc., restrict the development of the economy in order to develop the economy as soon as possible, to narrow the gap, we have to introduce technology, equipment, management, and even capital from outside At the same time, due to the backwardness, its export products have a weak ability to generate foreign exchange, and the foreign exchange supply is insufficient. The difference between its foreign exchange demand and foreign exchange supply cannot be made up by the foreign exchange surplus reflected in the foreign exchange balance sheet or international reserves, and the foreign exchange shortage is formed. low, the cost of its products is higher thus causing the mutual elasticity of substitution between imported products and domestic substitute products is very small, the cross-elasticity coefficient is even zero, the demand of the countrys residents turn to imported goods, just like the demand for cars in our auto market, in order to meet the demand of the residents, China has to continue to import products even if the government to control, using import quotas, tariff barriers and other policies, but there are still a large number of products through Formal channels, more mainly informal channels, such as smuggling, smuggling a constant flow of foreign exchange shortage into our market formation