Division on International Trade and Commodities 


UNCTAD's Course on Key Issues on the International Economic Agenda for Permanent Missions in Geneva

Short courses for Permanent Missions in Geneva

The general state of food security and agricultural commodity markets in developing countries

Palais des Nations, Geneva (Room XXVII)

Monday, 3 October 2011

A new global financial and monetary system should ensure, on a multilateral basis, the same rules of the game for all parties, just as multilateral trade rules apply to all trading partners. The main idea behind the creation of the International Monetary Fund was precisely to avoid destructive competitive devaluations. In a well-designed global monetary system, the advantages of currency depreciation in one country would have to be balanced against the disadvantages in another. Since changes in the exchange rate that deviate from purchasing power parity affect international trade in a very similar way to changes in tariffs and export duties, such changes should be governed by multilateral regulations. A multilateral regime would, among other things, require countries to specify the reasons for real devaluations and the magnitude of the necessary changes. If such rules were applied strictly, the real exchange rate of all parties would tend to remain more or less constant, since the creation of competitive advantages for specific countries or groups of countries would not likely be accepted.

Copyright © 2011 United Nations Conference on Trade and Development

vlasta.macku@unctad.org, mohan panicker@unctad.org

Last modified: Friday, 17 February 2012, 11:31 AM