If an exporter or~ importer uses a'foreign' currency, his income or costs will be immediately affected when the exchange rate changes; if he uses his own, there will = be no effect on contracts that are already fixed. Analysing the pattern of invoicing throws light oñ what objectives are, important in firms' decisions, and in particular on their attitudes toward foreign exchange risk. At the aggregate level, their choice of currency influences the effect of an exchange rate change on ã country's balance of trade.Although there was apparently some unpublished work at the ' IMF in 1969(Carse, 1980, it was, in the early 1970s that most European countries began to collect data on invoicing. Some information is now available for most European countries and for Japan.There is little reliable information for the rest of the world, except insofar as it can be derived from the area breakdowns provided by some of the European sources,..The data are now suffcient to show that the dollar is not brily the currency with the highest Share Tin trade, but is the only currency with a major role in trade between other countries. In most trade. between Industrial countries, however, both imports and exports are divided between the currencies of the trading partners. These results and the more limited evidence on how invoicing varies for each country'by commodity or trading partners are discussed in detail in the first section. The. data on which. currencies are used, and how they vary by countries, commodities and size of transaction, provide evidence on what objectives influence traders' decisions. They appear to have a strong preference for their own currency or a restricted range of other currencies. The second section suggests that this can be largely explained by their wish to avoid risks. The third section shows how the division between' currencies makes the &dquo;J curve' effe~cts of an exchange rate change less deep than is implied by the conventional assumption that the exporter's currency is always used. The time taken Table 1.. Currencies used~ in world trade Source: See Appendix. (a) Estimate.
Almost all trade among industrial countries is now invoiced in the currency of one of the trading partners, normally that of the exporter. Use of a ‘third country currency’ (normally the dollar) is important only in trade with developing countries. Except for the decline in sterling's use as an international currency, there is no evidence that exchange rate expectations are a strong influence on traders' choice of currency.
Access to markets is increasingly seen as an essential element in providing a route out of poverty, especially for small producers of food crops in rural areas. However, the nature of those markets is changing and bringing about shifts in both levels and forms of participation by small producers in global food systems. Small producers face new difficulties, for example in meeting high standards, but there are also new initiatives, for example by fair trade companies and co-operatives. This article focuses on nine initiatives and asks what small producers must do to achieve effective and sustainable access to markets, and how different private and public organisations can contribute to this.
Though it has become increasingly popular, indexation is not a new idea. As early as 1742 Massachusetts had an issue of bonds based on a few commodities and Jevons in 1875 and Marshall in 1886 advocated the use of a standard unit of purchasing power in contracts for deferred payments.
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