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| Author: | Rant, A. |
| Title: | The convertibility of the tolar |
| Journal: | Bancni vestnik
1996 : VOL. 45:4, p. 2-9 |
| Index terms: | |
| Freeterms: | Slovenia, finance, currency, Slovenian tolar, convertibility, balance of payments, economic equilibrium, adjustment, economy, stabilization |
| Language: | slv |
| Abstract: | Convertibility means exchanging one sort of money for an other.The concept undergoes some changes which follow the development of money.From the exchange which is needed to pay for goods and services abroad the present understanding of convertibility stretches to the field of trade in financial products.The international rules regarding currency convertibility for payment purposes abroad are set by the IMF.There exist no international rules on money convertibility for payments of financial products yet.Convertibility establishes the relationship between the external and internal markets, which balances the disequilibriums in foreign trade by monetary transactions. The control of monetary authorities over the liquidity capability of domestic demand relies on the selection of the foreign exchange regime.Monetary authorities may choose between the fixed exchange rate regime, by which adjustment is carried out through fluctuations in the amount of money in circulation and between the regime of floating exchange rates, with a given amount of money in circulation; in which case the adjustment is implemented through changes in the exchange rate.Sterilization of the effects of the balance of payments surplus is for the mone-tary authorities a very important question.It is important that the monetary authorities distinguish between the disequilibriums which derive from the current assets of the balance of payments and those deriving from capital.Money is most important for the balance of the disequilibrium in the short-run.Whereas, in the long-run, the costs of production and an appropriate structural adjustment policy to the requirements of demand are most appropriate methods. |
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