Vocabulary building Describing what happens to currencies

Deciding the value of a currency

• Many developing economies have their currencies pegged to the dollar.

• The government allowed the peso to float freely.

• Countries devalued their currencies to encourage exports.

• They revalued the currency to reflect the change in economic growth.

Increases in value

• The yen has appreciated around 7.5% against the dollar so far this year.

• The Swiss franc is strengthening against the euro.

Decreases in value

• The central bank cannot afford to defend a depreciating currency.

• The dinar weakened by 5% to the euro.

b) Think and answer.

1. Why do many developing economies have their currencies pegged to a sound currency? Is our domestic currency pegged to a hard currency?

2. What are the risks and advantages of allowing a domestic currency to float freely?

3. Why do some governments devalue national currencies?

4. Under what circumstances can the need to revalue a currency arise?

5. Has the hryvnia appreciated or weakened against the dollar so far this year?

6. Is the euro strengthening against the dollar these days?

7. Who is responsible for defending a depreciating domestic currency? What measures can be taken by these institutions? Are they always efficient?

_{Task 8. Practice reading the following words.}

actually [`ækt∫uəli] to allow [ə`lau] to alter [`O:ltə] / [`O:lt^ər] analogy [ə`næləGi] angle [`æŋg^əl] artist [`α:tıst] / [`α:rtəst] awkward [`O:kwəd] / [`O:kw^ərd] calculation [ֽkælkju`leı∫^ən] to capture [`kæpt∫ə] / [`kæpt∫^ər] to circulate [`sə:kjuleıt] conceptual [kən`sept∫uəl] to confuse [kən`fju:z] convenient [kən`vi:niənt] to create [kri`eıt] criteria [kraı`tıəria] deposits [dı`pOzıts] to enable [ın`eıb^əl] to facilitate [fə`sıləteıt] to grasp [grα:sp] / [græsp] to halt [hO:lt]

imaginary [ı`mæGın^əri] intangible [ın`tændჳəb^əl] interchangeably [ֽıntə`t∫eındჳəb^əl] merely [`mıəli] / [`mırli] nonetheless [ֽnAnðə`les] to overestimate [ֽəuvər`estımeıt] participant [pα:`tısıpənt] permanent [`pə:mənənt] to quote [kwəut] / [kwout] relative [`relətıv] screeching [skri:t∫ıŋ] standardised [`stændədaızd] straight [streıt] symbol [`sımb^əl] to touch [tAt∫] through [θru:] unreal [(ֽ)An`rıəl] / [(ֽ)An`ri:əl] value [`vælju:] viewed [vju:d] whereas [weər`æz] / [hwer`æz]

_{Task 9. Read the text.}