Exercises

Ex. 1. Answer these questions:

A. 1. Why is exchange of currencies necessary?

2. What makes exchange of currencies possible?

3. What is Rate of Exchange?

4. Where are currencies traded?

5. What major functions does the Foreign Exchange Market perform?

6. How does the Forex operate?

7. What are the major sectors of the Forex?

8. What deals are transacted in the market?

9. Why does the market depend on payment systems of individual countries?

B. 1. Is Russia making moves to enter the international financial markets?

2. How is the international foreign exchange market developing?

3. Who are the major participants?

4. What currencies can be bought and sold in the market?

5. How are exchange rates determined?

6. What factors affect the exchange rate?

Ex. 2. Give derivatives of:

national involve refer perform

exporters importer trading deal

transaction strength reliance purchase

transfer treasurer expose float

lend borrow estimate convert determine

Ex. 3. Say in a few words what the main text is about.

Ex. 4. Sum up the content of the dialogue.

Ex. 5. Work on vocabulary and grammar.

a) Study the key words of the unit in the dictionary at the back of this book:

option, rate, transaction, currency, quotation;

b) Think of the verbs that are most commonly used with:

currency, deals, trading, price, trading activities, restrictions, operations, quotations, financial flows;

c) Think of the nouns that are most often used with:

to exchange, to sell, to buy, to express, to obtain, to deliver, to trade, to clear, to settle, to set, to convert, to determine, to express, to hedge, to shift;

4. Make your own sentences with any five word combinations from (b) and (c).

5. Match the verbs from (a) with the nouns from (b) below:

a) to facilitate b) needs

to perform trade

to fix legislation

to enhance functions

to identify opportunities

to seek negotiations

to join profits

to liberalize financial community

to hold exchange rate

Ex. 6.

a) Supply the articles where necessary.

2. Write down 3-5 questions about the text.

3. Say what exchange rate policies are practised by different countries.

In ... late 19th century ... major trading nations fixed their currencies in terms of gold. Exchange rates were therefore fixed and these countries had essentially one common currency.

In July 1944, international negotiations were held at ... Bretton Woods, New Hampshire, USA, to identify ... basis of the new monetary system. The participants envisaged ... international monetary system that would determine exchange rate parities on the basis of consultations.

The postwar system was designed to be one of ... fixed but adjustable exchange rates. Member nations of ... IMF were expected to "peg" their currencies within ... narrow band of internationally agreed parities. The US pegged ... dollar in terms of gold and all other nations pegged their currencies in terms of the US dollar.

The breakdown of ... Bretton Woods system began when convertibility of the US dollar into gold ended in ... August 1971. In December 1971, the Smithsonian Agreement resulted in ... major devaluation of the US dollar, and multilateral adjustments in the major exchange rate parities. The US dollar crises of 1973 finally finished off Bretton Woods, when the major countries abandoned ... adjustable peg and floated their currencies against the US dollar.

Since then many countries have adopted ... wide range of exchange rate practices, including independent floats, group floating, pegging against a major currency, and pegging against ... "basket" of currencies such as the SDR (Special Drawing Rights).

Many countries, particularly less developed countries (LDCs) have chosen to peg their currencies to either ... single currency, to specially weighted "baskets" of currencies, or to the basket of currencies used by the IMF to calculate ... value of its SDRs. One benefit of the latter approach is that the IMF provides national exchange authorities with daily information on the value of... SDR basket.

Words you may need:

Англiйский варiант	Росiйський варiант	Український варiант
band	полоса, диапазон	смуга, діапазон
breakdown	падение, развал	падіння, розвал
multilateral adjustments	многосторонние корректировки	багатосторонні коректування
abandon	отказываться (от чего-л.)	відмовлятися (від чого-не будь)

Ex. 7.

a) Supply the prepositions where necessary.