|
|
Article: Exchange and mart: it's still too soon to assess the single currency's long-term effects on trade among the eurozone nations. But research by Geoff Pugh and David Tyrrall into the ERM shows that the elimination of exchange rate fluctuations offers a significant boost to import and export activity. (EU Exchange Rate Variability).
- Article from:
- Financial Management (UK)
- Article date:
- April 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 Chartered Institute of Management Accountants (CIMA). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Since the Bretton Woods system of fixed exchange rates broke down in 1973, businesses have traded across borders in an environment of unstable and unpredictable exchange rates. For the time being, that uncertainty has ended in the 12 European countries already participating in the single currency, at least as far as their mutual trading relationships are concerned.
One argument that's widely used in favour of having the euro is that international trade will benefit as a result. As Ian Campbell, director-general of the Institute of Exports, says: "If there's one thing that exporters hate more than a strong currency, it's one that's bouncing all over the place."
...