Chrome Consultants

Exchange Rates & Open-Economy Macroeconomics – The Basics for Financial Regulators

Program description & objectives

Program description & objectives In this course, we shift our focus and ask: How can economic policy, monetary policy, and the effective management of foreign exchange ensure that factors of production are fully employed? Furthermore, what determines how an economy’s capacity to produce goods and services changes over time? Flowing from the above, participants to this program will learn how the interactions between national economies influence the worldwide pattern of macroeconomic activity. The facilitators would also discuss the roles of trade in growth and welfare in an open economy. Delegates would also expand their knowledge on the causes and consequences of factor mobility, as well as the role of multinationals. Upon completion of course, participants will be able to understand and apply the following to policy making in the areas of foreign exchange management: - National Income Accounting and the Balance of Payments - Exchange Rates and the Foreign Exchange Market: An Asset Approach - Money, Interest Rates, and Exchange Rates - Price Levels and the Exchange Rate in the Long Run - Output and the Exchange Rate in the Short Run - Fixed Exchange Rates and Foreign Exchange Rates

Venues, Dates & Cost

VenuesDubaiDublinEdmontonGhanaLondonNigeria
DatesTBDTBDTBDTBDTBDTBD
Cost$3,800 per participant (USD)(=N=)

For Whom

  • Policy Staff of Central Banks
  • Bank and Non-Bank Financial Institutions
  • Regulators of Foreign Exchange Markets and Operations
  • Financial Crime & Fraud Prevention Employees
  • International & multilateral organisations
  • Public Policy Institutions

Snapshot of Course Content

Snapshot of Course Content

  • Define Gross Domestic Product (GDP) and discuss its usefulness as a measure of economic well-being.
  • List the components of GDP and the relative importance of each in GDP.
  • Define the current account, the trade balance, and the capital account balances.
  • Explain the relationship between national investment and national saving.
  • Distinguish between GDP and Gross National Product (GNP).
  • List the components of the capital account.
  • Describe the relationship between the current account and the capital account balances.
  • Identify how a country’s government budget balance and its current account balance are related.
  • List the principal participants in foreign exchange markets.
  • Define arbitrage.
  • Define an exchange rate, and distinguish between the spot and forward exchange rates.
  • List the components of the rates of return on domestic and on foreign deposits.
  • Explain how a currency appreciation or depreciation affects rates of return.
  • Define covered and uncovered interest rate parity, and to distinguish them from each other.
  • Define purchasing power parity and the conditions under which it holds.
  • Explain the relationship between the consumer price index and the purchasing power parity exchange rate.
  • Discuss the reasons why the purchasing power parity condition generally does not hold between two countries.
  • Define the real interest rate and to list its determinants.
  • Determinants of aggregate demand.
  • Explain the AA and DD curves and to list the changes that might make each shift.
  • Define the value effect and the volume effect.
  • Explain how the current account adjustment to currency appreciation or depreciation varies over time (the J-curve).
  • Use the IS/LM model to explain the effects of changes in monetary and fiscal policy.
  • Identify and describe the various fixed exchange rate systems.
  • Listing and explain the mechanisms central banks use to fix exchange rates.
  • Describe the effectiveness of fiscal and monetary policies under a fixed rate system.
  • Identify the features of a financial crisis.