Text-study

I. Learn the following words

Emerging market – зарождающийся рынок;

convertibility – конвертируемость;

to peg – прикреплять, охранять от колебаний;

to float – иметь плавающий курс;

outright – прямой, открытый;

cast-iron – непреклонный, твердый;

parity – равенство, паритет;

to weather – справиться, выйти из положения;

to forgo – отказываться, воздерживаться;

to tame – обуздать;

drawback – недостаток;

to soar – стремительно повышаться;

to fluctuate – колебаться;

vulnerable – уязвимый;

to crumble – разрушаться, обваливаться.

II. Answer the questions:

1. What country was regarded as an emerging-market success story, for much of the 1990s?

2. What was Argentina's success attributed to?

3. What measure to improve the financial situation in the country is envisaged by the convertibility law?

4. Why do you think a "currency board" arrangement is superfashionable among economists?

5. What two choices for emerging economies does the author speak about?

6. What system worked for Hong Kong?

7. What are the drawbacks of a currency board?

8. Why is devaluation a far more drastic option for Argentina than for Brazil?

9. Why are weaker pegs now recognised as dangerous?

10. What happens to an emerging economy when investors lose confidence?

III. Complete the sentences with suitable words from the box

an emerging-market-success story; lose confidence; an exchange-rate system; an open-ended promise; to set its own monetary policy

1. At the beginning of the 1990s, Argentina was regarded as … .

2. It amounts to … to swap dollars for pesos at the promised parity.

3. It means that the government forgoes its right … .

4. When investors … , as happened in Thailand in 1997, interest rates soar.

5. In many emerging markets, the apparent failure of … also looks like the failure of the IMF.

IV. Give Russian equivalents for the following words and phrases used in the text

adoption of a convertibility law; "currency board" arrangement; architect of the convertibility law; devaluation; the floatation of the real; the currency peg; foreign-exchange reserves

V. Translate the following sentences from the text into Russian in writing

1. In recent years, whenever an emerging economy's currency - be it the Indonesian rupiah, the Russian rouble, the Brazilian real or the Turkish lira - has hit the rocks, some wise man has been on hand to tell the failing government that a currency board would solve all its troubles.

2. Short of outright dollarisation, this is the cast-iron way to fix a currency.

3. Such a system worked, for example, for Hong Kong, whose dollar weathered the Asian currency crisis.

4. Instead of fixing the currency at a set parity, the government lets its value fluctuate within a pre-set range; and that range itself moves over time against the other currency (usually downwards).

5. And, even in the medium-to-long term, foreign-exchange markets are capable of producing currency misalignments.