Reforming the International Monetary System in the 1970s and 2000s: Would an SDR Substitution Account Have Worked

This paper analyzes the discussion of a substitution account in the 1970s and how the account might have performed had it been agreed in 1980. The substitution account would have allowed central banks to diversify away from the dollar into the IMF’s Special Drawing Right (SDR), comprised of US dollar, Deutschmark, French franc (later euro), Japanese yen and British pound, through transactions conducted off the market. The account’s dollar assets could fall short of the value of its SDR liabilities, and hedging would have defeated the purpose of preventing dollar sales. In the event, negotiators were unable to agree on how to distribute the open-ended cost of covering any shortfall if the dollar’s depreciation were to exceed the value of any cumulative interest rate premium on the dollar. As it turned out, the substitution account would have encountered solvency problems had the US dollar return been based on US treasury bill yields, even if a substantial fraction of the IMF’s gold had been devoted to meet the shortfall at recent high prices for gold. However, had the US dollar return been based on US treasury bond yields, the substitution account would have been solvent even without any gold backing

Living with flexible exchange rates:

This overview paper examines two main issues. The first is why the exchange rate matters, especially for emerging market economies. The second is under what circumstances and how countries have dealt with the challenges posed by the exchange rate in recent years in the context of inflation targeting. We find that emerging market economies, being more exposed to the influence of the exchange rate, are likely to accord the exchange rate a bigger role in policy assessment and decision-making. However, even with the greater emphasis on the exchange rate, the emerging market economies under review have not acted in contradiction to their announced inflation targets. Furthermore, recent experience shows that having to keep an eye on the exchange rate is also a fact of life in industrial economies, inflation targeting or not.inflation targeting emerging markets exchange rate

Fish choruses from the Kimberley, seasonal and lunar links as determined by long term sea noise monitoring

Calling fish are a dominant component of Kimberley sea noise. Sea-noise loggers set in the Kimberley since 2004 under Industry and Defence funding have recorded a plethora of call types and choruses, where many fish call en masse. Fish choruses show daily and seasonal periodicity and most show lunar periodicity. At the longest site sampled over 2006-2010 from Scott Reef southern lagoon, a chorus produced by nocturnal planktivorous fishes displayed coupled daily, lunar and seasonal trends with calling most intense over late evening from October to April, least intense over June to August, but continuing at some level all year. This chorus is believed associated with feeding. As a comparison a near shore chorus produced by fish of the family Terapontidae is only produced over November to May, again at night. This chorus is believed associated with reproduction. As has been observed before, where multiple chorus occur each night which overlap in frequency content, time separation acts to reduce competition for the 'sound space'

"Currency intervention and the global portfolio balance effect: Japanese and Swiss lessons, 2003-2004 and 2009-2010"

This paper shows that the Japanese and Swiss foreign exchange interventions in 2003/04 and 2009/10 seem to have lowered long-term interest rates in a range of industrial countries, including Japan and Switzerland. It seems that this decline was triggered by the investment of the intervention funds in US and euro area bonds and that a global portfolio balance effect made this decline in interest rate spread to other markets, thus easing monetary conditions at home and abroad.

Currency intervention and the global portfolio balance effect: Japanese and Swiss lessons, 2003-2004 and 2009-2010

This paper shows that the Japanese and Swiss foreign exchange interventions in 2003/04 and 2009/10 seem to have lowered long-term interest rates in a range of industrial countries, including Japan and Switzerland. It seems that this decline was triggered by the investment of the intervention funds in US and euro area bonds and that a global portfolio balance effect made this decline in interest rate spread to other markets, thus easing monetary conditions at home and abroad.