Lecture 16

The world market. The international currency and credit relations

• The plan:• 1 World market and international trade• 2 International currency systems• 3 World market of loan capitals• 4 Cooperation of Republic Uzbekistan with the

international financial organisations

• The world market is a set interconnected and co-operating руг with the friend of the national markets of the separate states participating in the international division of labour, in international trade and other forms of economic relations.

• International trade is the form of the international economic relations which are carried out by means of export of goods and services

• Foreign trade are two streams of the goods and services, moving on a meeting each other, forming export and country import

• The sum of cost of estimations of export and import is called as the foreign trade turnover, and the difference of these estimations forms trading balance

• Advantages of the international specialisation and trade:

• 1) absolute – at release and an exchange of the goods with smaller direct production costs

• 2) comparative – at release and an exchange of the goods with smaller alternative production costs.

• The form of counter trade:• - Barter – безвалютный, a high-grade exchange• - Counter purchases of exporters on a part of cost of the put goods• - The repayment of out-of-date technics at sale of new models• - Indemnification of the imported equipment parts and details of

manufacture of the country-importer• - Compensatory agreements on which conditions there is a credit

repayment (financial, commodity), presented by the party delivering the process equipment

• - Processing of the raw materials extracted in one country, the made capacities of other country with payment of cost of processing and transportation by additional deliveries of raw materials (давальческие transactions)

• The world price expresses international cost of the goods of socially necessary quality in the monetary form

• In modern conditions there are following price levels:• 1) the prices under usual commercial transactions with

payment:• - In it is hard to currency• - In unconvertible or ограниченно to convertible currency• 2) the prices under clearing agreements• 3) the prices under help programs

• Внешнеэкономическая политика государства – совокупность мер государства, направленных на развитие и регулирование экономических отношений с другими странами

• Основные направления внешнеэкономической политики:• 1 Протекционизм – это политика защиты отечественных

производителей от иностранных конкурентов • 2 Фритредерство – это политика свободной торговли,

основанная на принципе сравнительных преимуществ

• Protektsionistichesky measures:• 1 Custom duties are the systematised list of duties with

which the governments assess some goods which are imported into the country or taken out from it.

• The customs duties are the taxes raised by the state for transportation through border, the country of the goods, property, values. On object of collection the customs duties happen export, import and transit. On a way of collection they share on адвалорные (from the goods price), specific (from weight, volume, quantity of the goods) and mixed.

• 2 Quantitative or not tariff restrictions – the direct administrative norms established by the state defining quantity and the nomenclature of the goods, resolved to import or export.

• Kinds of quantitative restrictions:• Contingent – restriction of export and import of the goods by

certain quantity or the sum (contingent) for the established period of time.

• Квотирование is a restriction of quantity of export or import of the goods of the certain name.

• Licensing – an interdiction for import or export of the goods without licence presence.

• Other means of not tariff restriction: customs and consular formalities, internal taxes, the duties, the certain quality standards, norms of packing, marks and a number of similar measures.

• The balance of payments is the systematised record of results of all economic transactions between residents of the given country and other world during the certain period of time of usual year.

• Economic appointment of the balance of payments consists in that in the laconic form to reflect a condition of the international economic relations of the country with its foreign partners, being the indicator for a choice of necessary tools of economic policy.

• The international currency system – the set corrected, laws, establishments which regulate activity of the central banks of issue in foreign markets.

• Components of the international currency system:• - The basic international means of payment (national currencies, gold,

СДР, ЭКЮ)• - The mechanism of an establishment and maintenance of rates of

exchange• - Conditions of convertibility (convertibility) of currencies• - A mode of the international markets• - Definition of the status of the interstate financial institutions

regulating currency relations

• National currency system – the form of the organisation of currency relations of the country, defined by the national legislation

• Convertibility of currency is an ability of national monetary unit freely to be used in various international payments.

• The rate of exchange – cost of monetary unit of one country, expressed in monetary units of other country.

• Currency regulation – state activity on regulation of international payments, management of the currency reference, influence on the rate of exchange of national currency, to control over currency transactions, including over foreign currency use.

• The main object of currency regulation - the rate of exchange of the national monetary unit, which change essentially influences foreign trade, the country balance of payments, debts both other phenomena and processes.

• Method of regulation of rates of exchange:• - Currency intervention• - Currency restrictions• - Rationing of export of currency for the tourists who are going abroad• - Introduction of restrictions on outflow of the capital and even a

regulation of import of the capital, regulation of interest rates which affects movement of the currency values which have been not connected with international trade by the goods and services and other actions.

• Devaluation of national currency – decrease in exchange rates of national monetary unit for the purpose of consumer demand stimulation in home market and strengthenings of competitiveness of own goods in the world market.

• Revaluation of national currency – increase of exchange rates of national currency for the purpose of consumer demand stimulation in home market and stimulations of import of the goods and inflow of foreign investments.

• Currency intervention – purchase and sale own or foreign currency the central banks that influences supply and demand change on them so, demands correction of the rate of exchange.

• Currency restrictions – system of standard rules on restriction of operation with foreign currency, gold and some other currency values.

• Management of the international currency system is carried out by the international financial organisations which number concern: the international currency fund (IMF), the international bank of reconstruction and development (IBRD), the organisation of economic cooperation and development (ОЭСР), the international association of development (МАР), etc.

• Capital export is a withdrawal of a part of the capital from process of a national turn and inclusion in production in various forms in other countries.

• The enterprise capital is taken out or for creation of own manufacture abroad, or for an investment of money to the local companies.

• The loan capital is taken out in the form of loans, the credits bringing loan percent

• The main line of the loan capital as economic category is transfer of cost to time using for the purpose of realisation of its specific quality – abilities to make profit in the form of percent.

• The world market of loan capitals (МРСК) is a set of supply and demand on the loan capital of borrowers and creditors of the different countries. Its main objective – accumulation and redistribution of financial resources by means of intermediaries.

• In МРСК it is allocated four structures:• 1 – functional• 2 – institutional • 3 – geographical • 4 – currency • The world monetary market (МДР) – supply and demand of the

capital which functions as international consumer and means of payment.

• The interbank market – set of relations between banks concerning granting of short-term loans a minimum of 1 million dollars

• The world credit market is a set of credit relations which function in world economy scales, supply and demand of credits in the international sphere.

• The world market of securities is supply and demand of securities at the international level.

• Institutional structure MRSK reflects relations between professional financial intermediaries, borrowers and creditors of the different countries and assumes allocation of subjects МРСК

• Geographical structure MRSK reflects capital movement between the countries, groups of the countries, world regions mainly through the international financial centres.

• The offshore companies are firms operating in region where the preferential taxation and customs regulation prevail.

• The national currency market – use by borrowers and creditors of national currency of the given country.

• The international currency market – set of the national currency markets. It is characterised by use of national currency and the international collective currency.

• The eurocurrency market – relations between borrowers and creditors concerning use of money resources in currencies which function as the loan capital out of the country of their origin

• The basic tendencies of development of the world market of loan capitals:

• 1 Increase of volume and a role of the bonded loans expressed in foreign currency, on the eurocurrency market.

• 2 Decrease in a role of US dollar in the world market loan капилалов.

• 4. The republic Uzbekistan is a member of many international organisations, such as the United Nations on industrial development (ЮНИДО), the Economic and social commission of the United Nations for Asia and Pacific ocean, the Commission of the United Nations by the right of international trade, the Program of development of the United Nations, Conference of the United Nations on trade and development (ЮНКТАД), the Economic commission of the United Nations for Europe, the International shopping centre, the World bank of reconstruction and development, the International financial corporation, the International association of development, the International currency fund, the Organization of economic cooperation etc.

• Uzbekistan spends the big work on formation of the open market economy which basis is wide participation of the country in мирохозяйственных communications.

• Now strategy of the World bank in the area of IBRD on financial assistance of republic for 2008-2011 operates.

• The current portfolio of projects puts a basis for four basic lines of activity within the limits of Strategy of the World bank of assistance to the country for the period with 2008 for 2011 in support of state priorities:

• - Improvement of environment for economic growth.• - Growth of economic possibilities on village

• - Efficiency increase in granting of services of the population

• - Management of environment and granting of the global public blessings.

• Realised in Uzbekistan joint with АБР programs and projects are focused on 4 key spheres: agriculture, advancement of frequent business, regional cooperation in transport and customs transit and improvement of social services with accent on child care and base formation.