In the structure of the foreign economic policy of any state, a special role is played by the monetary policy, which includes a set of measures to maintain the stability of the state monetary unit and ensure foreign trade economic relations, which are aimed at achieving the planned macroeconomic development guidelines. Monetary policy is also seen as an integral part of the global macroeconomic system of the state, along with such important components as the fiscal, monetary and structural investment systems. Consider this concept in more detail.
Foreign exchange policy is a mechanism of currency regulation and foreign economic strategic planning that determines the official position of the country regarding control over the circulation of foreign currency and certain exchange restrictions, as well as the exchange rate regime. The main instruments of monetary policy are subsidies, interventions and parities. Legally, this type of state policy is fixed by the currency legislation, which regulates the procedure for conducting foreign exchange transactions throughout the country.
The foreign exchange policy includes such crucial components as the regulation of exchange rates, the management of the convertibility of the national currency and the policy of controlling the state's foreign exchange reserves . With the help of two polar opposite systems of regulation of exchange rates, the state determines this or that form of monetary policy. Distinguish between fixed and floating exchange rates. In the range between these options, many different combinations are possible, which gives particular flexibility to the monetary policy.
The choice of the monetary policy regime pursued by the government of the country most fundamentally affects the price level of consumer goods sold both on the domestic and foreign markets. Monetary policy is an extremely dynamic structure, its form and elements can change under the influence of various factors of the evolution of the global financial economy, the country's economic situation, industrial production volumes, the balance of power in the world political arena and other equally important conditions.
The most effective methodology for conducting monetary policy is the motto system, which provides for the regulation of the national currency exchange rate through the purchase and sale of cash from foreign countries. Such a system can take various forms. For example, currency restrictions and intervention, diversification of gold and foreign exchange reserves and others.
Now in the world more than a dozen different regimes of monetary policy are being read. While conducting large-scale economic reforms, some states resort to the dual currency market strategy , which involves dividing the single system into two components: the official sector used for commercial operations, and the market sector, where various financial and exchange transactions are carried out.
But the traditional methods of monetary policy are still devaluation (depreciation of the own currency in relation to the dollar) and revaluation - an increase in this rate.