1 . A current account bank deposit — депозит текущего банковского счета

2. a liquid asset — ликвидный актив

3. to dispose of — распоряжаться имуществом путем продажи (ликвидировать)

4 . marketable securities — ценные бумаги, имеющие хождение на рынке

5 . stocks and bonds — акции и облигации

6 . liquidity preference — ликвидное предпочтение

7.7.1.2. Read and translate the text “Currency Crisis.” Try to explain the cause for currency crisis.

в з а в и с и м о с т и

о т

с р о ч н о с т и

о п е р

а ц и й ?

• “ sw a p ”

o p e r a t i o n ( j o i n t

s p o t

a n d f o r w a r d

o p e r a t i o n s )

101

US would no longer be able to stabilize the price of the dollar, and a currency crisis would ensue.

A currency crisis occurs when a country can no longer support the price of its currency in foreign

exchange markets under a fixed exchange rate system. Many such crises occurred in the past several

decades when countries attempted to maintain a fixed exchange rate that was in disequilibrium.

Vocabulary Notes to Text 7.7.1.2

1. to buy up — скупать

2. to run out — истощаться

3. to ensue — происходить (последовать)

7.7.1.3. Read and translate the text “An Example of Determining Foreign Exchange Rates

in a Market.” Answer the question: Is the given example of parity of currencies — $ and ￡ — typical

of other goods and services?

An Example o f Determining Foreign Exchange Rates in a Market

When you decide to buy foreign products, such as Scotch whisky, you have dollars to pay the

Scottish alcohol drink maker. The Scottish alcohol drink maker, however, cannot pay workers in

dollars. The workers are the Scotch, they live in Scotland, and they need sterlings to buy goods and

services in that country. There must be, therefore, some way of exchanging dollars for sterlings that

the alcohol drink maker will accept. That exchange occurs in a foreign exchange market, which in

this case specializes in exchanging sterlings and dollars. (When you obtain foreign currencies at a

bank or an airport currency exchange, you are participating in the foreign exchange market.)

The particular exchange rate between sterlings and dollars that would prevail depends on the current

demand for and supply of sterlings and dollars. In a sense, then, our analysis of the exchange rate between

dollars and sterlings will be familiar to us, for we have already used the supply and demand terminology. If

it costs you $1,5 to buy ￡1, this is the foreign exchange rate determined by the current demand for and

supply of sterlings in the foreign exchange market. The Scotsman going to the foreign exchange market

would need one pound sterling to buy one and a half dollar. (Of course, our numbers are hypothetical.)

7.7.1.4. Read and translate the text “The Use of Gold and Foreign Exchange Reserves” and give

a synopsis of it in Russian.

The Use o f Gold and Foreign Exchange Reserves

In the functioning of the world exchange system great importance is attached to gold and foreign

exchange reserves. What are these reserves?

This is the stock of gold and foreign currencies held by a country to finance any calls that may be

made from its creditors for the settlement of debt. Reserves used to be held primarily to finance the

balance of payments. Pressure on the reserves, therefore, tended to reflect underlying trading problems

of the country in question, or sometimes the expectation of a fall in the exchange rate which led

people to sell their holdings in the currency. Today, however, currencies are more freely traded than in

former times, and the national reserves are not used to finance private transactions. As a result, the

reserves are primarily seen as a tool for influencing the exchange rate. The authorities can use them to