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	<title>Bikibook.com &#187; exchange rates</title>
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		<title>How well are fluctuating exchange rates working?</title>
		<link>http://bikibook.com/how-well-are-fluctuating-exchange-rates-working-1490.html</link>
		<comments>http://bikibook.com/how-well-are-fluctuating-exchange-rates-working-1490.html#comments</comments>
		<pubDate>Sat, 22 May 2010 07:40:58 +0000</pubDate>
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				<category><![CDATA[Banking, Currency and Foreign Exchange]]></category>
		<category><![CDATA[exchange rates]]></category>
		<category><![CDATA[foreign currencies]]></category>
		<category><![CDATA[foreign currency]]></category>
		<category><![CDATA[foreign exchange]]></category>

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		<description><![CDATA[Focusing on the questions (a) of how well fluctuating exchange rates are working and on the related issue (b) of what sort of guidelines should be established to regulate central bank intervention in exchange markets is particularly appropriate now for a number of reasons. First, despite the float, the dollar continues to slip in exchange markets even after the President&#8217;s announcement last Wednesday of his new anti-inflationary measures. One wonders whether these current disturbances are in fact less disruptive under fluctuating rates than they would have been under previous fixed-rate arrangements. Second, the point has been made that perhaps floating rates will be with us, if not forever, at least for a good long time. Otmar Emminger, deputy governor of the West German Bundesbank, recently suggested that the world might have to live with floating rates indefinitely in order to keep international capital flows in check. He said: &#8220;It is difficult to see how we can dispense with a more elastic exchange rate system.&#8221; A third reason why it is appropriate to focus on these two questions today is that as long as inflation continues at present rates in the major industrial countries, and especially in the United States, fluctuating [...]


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