The term “Kangaroos Definition” is a technical term used in the field of economics and refers to the informal definition of the Australian dollar. The term was first used in the early 1990s by economic commentators in Australia and is now used internationally. The kangaroo definition of the Australian dollar is the exchange rate at … Read more
A policy of import substitution industrialization (ISI) is one in which a country protects its domestic market from foreign competition by tariffs, quotas, and other trade restrictions in order to allow its infant industries to grow. The goal is to develop the country’s industries so that they can eventually compete in the global marketplace. ISI … Read more
The term “Common Equity Tier 1 (CET1)” refers to the core tier of a bank’s equity capital, which consists of common stock, retained earnings, and other disclosed reserves. CET1 capital is considered to be the highest quality capital, and is therefore the most important component of a bank’s total capital. CET1 capital is used to … Read more
Demonetization: What It Is and How It Works What do you mean by demonetisation and explain its impact? Demonetisation is the process of withdrawing a particular currency unit from circulation and making it no longer legal tender. The impact of demonetisation can be both positive and negative. On the positive side, it can help to … Read more
A liquidity adjustment facility (LAF) is a monetary policy tool used by the Reserve Bank of India (RBI) to regulate the money supply in the economy. The LAF consists of two components: the repo rate and the reverse repo rate. The repo rate is the interest rate at which the RBI lends money to banks, … Read more
The Fed’s Tapering: How, Why, and When It Happens, and Its Impact on Financial Markets What happens when the Fed stops buying bonds? When the Fed stops buying bonds, the prices of those bonds will fall and interest rates will rise. This will lead to higher borrowing costs for businesses and consumers, and will reduce … Read more
The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and … Read more
The Asian Currency Unit (ACU) is a basket of currencies of Asian economies that are significant trading partners of each other. The ACU currently includes the Chinese yuan, Japanese yen, South Korean won, and Hong Kong dollar. The basket is maintained by the Asian Development Bank (ADB) and is used to measure the ADB’s own … Read more
The Old Lady Definition is a set of guidelines used by the Bank of England to help it set monetary policy. The definition was first set out in a speech by then-Governor Mervyn King in 2003, and it has been used by the bank ever since. The definition is based on the idea that the … Read more
