Technical Report on Possible Uses of the Ecu in International Relationships Between the Ec and Latin America and the Development of Ecu-dominated Financial Services |
Contents
POSSIBLE USE OF THE ECU FOR INVOICING | 11 |
ROLE OF THE ECU IN AN OPTIMAL CURRENCY | 25 |
CURRENCY DIVERSIFICATION FOR LATIN AMERICAN | 35 |
Common terms and phrases
Argentina banks basket Bocconi University borrowing Brazil CHART choice Colombia commodity producing firm composition of external constraint countries under analysis currency composition currency diversification debt service denominated deutsche mark developing dollar/ecu domestic ecu-denominated equation estimated Euro European currencies exchange rate changes exchange rate pegs exchange risk existing external debt FINEX foreign exchange foreign exchange markets forward contracts french franc futures contracts futures exchange futures markets hedge ratios hedging strategy home country importer includes the ecu interest rates invoice currency issue Latin American countries Latin American exporter Latin American operators loans matrix ments nominal numeraire country optimal peg optimal weights P₁ parameters portfolio position prices and exchange rate risk Real Effective Exch.Rates real exchange rate redenomination rency risk premia spot price stabilization t-statistic Table target tion trade shares transaction costs unexpected changes unexpected exchange rate variables vector Venezuela vis-à-vis