International Monetary Fund

The International Monetary Fund, an association of governments, was set up on 27^th December, 1945, as a result of the Bretton Woods Agreements which were designed to translate the bitter lessons of global depression into … stable and cooperative international monetary system. The organizational structure of the IMF is set out in its Articles of Agreement, which entered into … force in December 1945. The goals of … IMF are to promote international monetary cooperation through a permanent institution; to facilitate the expansion and balanced growth of international trade; to promote exchange stability; to assist in the establishment of a multilateral system of payments in respect of current transactions between members; and to provide members with an opportunity to correct maladjustments in their balance of payments without resorting to measures destructive to national and international prosperity. Over many years the IMF has been directly involved in supporting … efforts to developing countries to pursue broad structural reforms and achieve sustainable growth. As of August 1, 1994, 179 countries were members of the IMF. Each member government has been set … quota to be paid into the Fund, payable partly in … gold and partly in the member’s own currency; the quota determines the member’s voting power and … amount of foreign exchange that it may draw from the Fund. A member may purchase foreign exchange, paying its own currency, but … member must “repurchase” its own currency within three or, at the outside, five years to maintain the balance in the Fund pool. Currencies drawn from the Fund may be used to relieve … member’s balance-of-payments difficulties; the funds may not be used for military purposes or for programmes of economic development. The aim is to assure … maintenance of fixed exchange rates in the face of short-term fluctuations. Many countries have been helped in this way. Each member undertakes to establish and maintain an agreed par value for its currency, and to consult the Fund on any change in … initial parity.

In addition, the Fund consults with members on their international financial situation and on specific problems as they arise. On request, the Fund furnishes expert missions to advise and assist … governments in working out monetary problems on the spot. In any event, members are kept informed of … latest developments. Policies are laid down by a Board of Governors, representing all members, which normally meets annually. Many of its powers are delegated to a Board of Executive Directors. In recent years, the resources of the Fund have been supplemented by resources of … Group of Ten.

Vocabulary

To be designed быть предназначенным для чего-либо

To enter into force вступать в силу

Balanced сбалансированный

Multilateral system многосторонняя система

In respect of в отношении

To correct maladjustments исправлять диспропорции

To resort (to) прибегать к

Structural reforms структурные реформы

Voting power голоса в руководящих органах

To purchase покупать

To maintain the balance поддерживать баланс

Pool пул

To relieve облегчать

Fluctuation колебание

Par value валютный паритет, номинал

Parity паритет

To furnish (зд.) предоставлять

On the spot на месте

To lay down устанавливать, формулировать

Board of Governors Совет управляющих

Powers полномочия

To delegate делегировать

Board of Executive Directors Совет исполнительных директоров

Exercise 17. Choose the correct explanation without using a glossary.

1. “participated in by more than two parties, nations, etc.” is …

a) multinational

b) multilateral

c) multifold

d) manifold

2. “to have recourse, to go or turn (to) for use, help, support, etc.” is …

a) to resаrt

b) to resоrt

c) to restore

d) to come

3. “to obtain for money or by paying a price; to buy” is …

a) to purchase

b) turn over

c) to furnish

d) to establish

4. “to ease, lighten, or reduce (pain, anxiety, etc.) is …

a) to recall

b) to relax

c) to fulfill

d)to relieve

5. “moving back and forth or up and down; rising and falling” is …

a) fluency

b) mobilization

c) fluctuation

d) reflection

6. “special authority assigned to or exercised by a person or group holding office” are …

a) strength

b) powers

c) forces

d) energy

7. “to send or appoint as a representative or deputy” is …

a) to delegate

b) to mention

c) to call

d) to determine

8. “to change so as to fit, conform, make suitable, etc.” is …

a) to adjust

b) to define

c) to impose

d) to affect

9. “to place or set (a burden, tax, fine, etc. on or upon) as by authority” is …

a) to suppose

b) to lay

c) to impose

d) to declare

10. “to keep or keep up; to continue in or with; carry on” is …

a) to hold

b) to fold

c) to succeed

d) to maintain

Exercise 18. Reread the article of exercise 16 more carefully and complete the sentences given below using information from the article:

1. The International Monetary Fund, an association of governments, was set up on _________________, as a result of ____________________________________

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2. The organizational structure of the IMF is set out in

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3. The goals of … IMF are ________________________________________________

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4. Over many years the IMF has been directly involved in __________________

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5. A member may purchase foreign exchange, paying its own currency, but __________________________________________________________________________

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6. Each member undertakes to establish and maintain an agreed par value for its currency, and to consult the Fund on ___________________________

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7. In addition, the Fund consults with members on their international financial situation and on ____________________________________________________

_____________________________________________________________________________ .

8. On request, the Fund furnishes expert missions to advise and assist the governments in _____________________________________________________________

____________________________________________________________________________ .

9. In any event, members are kept informed of ___________________________

____________________________________________________________________________ .

10. Policies are laid down by a Board of Governors, representing all members, which normally meets ___________________________________________ .

Exercise 19. Single out the main facts of the article of exercise 16 and present them in a short review.

Exercise 20. Listen and retell the text. Write down 3-5 questions about the text. Say what is the present day situation with Hungarian current account and trade figures.

Current account and trade data good but pension funds shaky

Hungary’s latest batch of current account and trade figures showed continued improvement but fears of social security overspending remained, analysts said last Tuesday. “Quite a big increase can be expected in the public sector deficit in the next few months because of the pensions. The next government will probably try to consolidate the budget,” he stated, adding that the budget policy of the present government is very expansive.

The analysts said the increase in the budget gap slowed down in the past two months, but a smaller-than-planned revenue for social security could cause surprises. “More than expected people entered the new pension system which will mean a loss of revenues in the redistribution system.”

A Finance Ministry official said last Tuesday that as much as HUF 35 billion contribution to the pension funds could go to the private funds this year, compared with their earlier estimate of HUF 20 billion.

The analysts, however, were pleased with the current account and trade deficits.

“The current account deficit of USD 442 million is positive. This predicts that the current account deficit may be USD 1 billion this year which is very low”. Analysts said Hungary’s trade figures were also continuing to improve, as most of the country’s exports go to the European Union and it is not exposed to the Asian markets.

The Ministry of Industry and Trade (MIT) published its figures which showed that Hungary’s foreign trade deficit was down USD 80 million year-on-year, with the figures based on customs statistics. MIT figures showed that 80 percent of Hungary’s exports have been going to industrialized countries, two or three percent to developing countries and the rest to former communist countries.

Exercise 21. Translate the article into English. Pay attention to the use of tenses.

Юань не спешит конвертироваться

Китай занимает сегодня одну из лидирующих позиций в мировой экономике. Однако, несмотря на поступившее в 2000 году предложение МВФ ввести в обращение так называемый китайский доллар, а проще говоря юань, котирующийся на мировых валютных биржах, Пекин не торопится делать свою валюту свободно конвертируемой. Нынешнее положение юаня – сейчас он конвертируется только по текущим операциям, но не операциям, связанным с движением капитала, – Пекин вполне устраивает. Более того, Китай даже гордится тем, что неполная конвертируемость женьминьби (в переводе– «народные деньги») помогла ему пережить восточноазиатский экономический кризис 1997 года, в отличие от, скажем, Таиланда. Как известно, именно массовая продажа иностранцам свободно конвертируемой тайской валюты – бата – и послужила началом кризиса.

По большому счету Китай может хоть сейчас начать продавать юани на мировом рынке. Золотовалютные запасы составляют порядка 200 миллиардов долларов, и этой суммы вполне хватит на поддержание стабильного курса и масштабные интервенции в случае необходимости. Но такой шаг не имеет особого смысла. После реформы валютного регулирования 1994 года были введены единые курсы валют по отношению к женьминьби, создана единая система валютных расчетов, продаж и переводов, на основе чего возник единый межбанковский валютный рынок. Вся банковская система Китая находится под сильным госконтролем, осуществляемым Народным банком КНР, и иностранная валюта ей особенно не нужна. Иностранцы, ведущие дела в Китае, уже привыкли к стабильному юаню (на протяжении нескольких лет его курс держится на отметке 8– 8,5 юаня за доллар, что достигается регулярными интервенциями). Что касается китайских долларов, продающихся за границей, то там окончательные расчеты все равно осуществляются в долларах или евро. К тому же для международных расчетов у Китая есть еще и резервная валюта. Это свободно конвертируемый гонконгский доллар. А также существует патака, доставшаяся в наследство Китаю вместе с Макао (Аомэнь), и пока не выведены до конца из обращения вайхуэйцзюар, или «красные юани», использовавшиеся в 80-х – начале 90-х годов в качестве «заморских денег», аналогичных внешторговским чекам в СССР. Так что еще одна денежная единица, имеющая хождение на мировых рынках, будь то юань или «китайский доллар», для страны сейчас – ненужная роскошь.

Константин Волков

«Итоги», 27 мая 2003

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LESSON 2

Европейский банк реконструкции и развития

Exercise 1. Read and discuss the text that follows. Use the glossary given after it. Describe the facilities under which resources are made available to the IMF members. Explain the “conditionality” principle of the IMF.

The IMF’s financial resources are made available to its members under a variety of facilities and policies, depending on the circumstances, especially the nature of the macroeconomic and structural problems to be addressed.

The IMF makes resources available under both its general resources and its concessional financing facilities. Member countries use the general resources of the IMF by making a purchase (drawing) of other members’ currencies or SDRs with an equivalent amount of their own currencies. The IMF levies charges on these drawings and requires that members repurchase (repay) their own currencies from the IMF with other members’ currencies or SDRs over a specified time. Concessional financing under the structural adjustment and enhanced structural adjustment facilities is made available in the form of loans.

Regular facilities include: Reserve tranche, Credit tranches, Stand-by Arrangements, Extended Fund Facility. In providing financial support to any member country, the IMF must be assured that the member is pursuing policies that will ameliorate or eliminate its external payments problem. The requirement that members make a commitment to a set of policy measures aimed at correcting economic and financial imbalances within a reasonable period in return for IMF financial support is known as “conditionality”. “Conditionality” is designed to ensure that members using IMF resources will be able to repay the IMF in a timely manner.

IMF-supported programmes emphasize certain key aggregate economic variables, including domestic credit, the public sector deficit, international reserves, and external debt. They also emphasize crucial elements of the pricing system – including the exchange rate, interest rate, and, in some cases, commodity prices – that significantly affect the country’s public finances and foreign trade.

A successful adjustment programme must elicit an adequate response from the supply side of the economy. Interest rates and exchange rates are particularly important, since they influence savings and investment decisions and, therefore, a member country’s growth prospects.

Adjustment programmes, typically, have an impact on income distribution, employment and social services. While the promotion of sound macroeconomic policies and structural reforms contributes to sustained growth and employment, adjustment may also involve short-term social costs to vulnerable groups. The IMF staff analyse the implications of reform measures for vulnerable groups and advise the authorities on how best to integrate social safety nets and their financing into programmes.