Base money, also known as MonetaryBase, strong money and initial money, is also called High-poweredMoney because of its ability to multiply or shrink the total money supply. It is a debt certificate issued by the central bank, which is manifested in the deposit reserve of commercial banks (R) and the currency held by the public (C). In the report of the International Monetary Fund, the base currency is called the reserve currency, which means the total amount of money printed. The base currency is the basis for the entire commercial banking system to create deposit currency, and it is the source of the multiple expansion of deposits in the entire commercial banking system.
According to the definition of the International Monetary Fund's Handbook of Monetary and Financial Statistics (2002 edition), the base currency includes all kinds of liabilities provided by the central bank to support the expansion of broad money and credit, mainly referring to the currency held by banks (cash on hand) and the currency outside banks (cash in circulation), as well as the deposits of banks and non-banks in the monetary authorities. In the report of the International Monetary Fund, the base currency is called the reserve currency. To put it bluntly, it is the total amount of money actually issued.
Question 2: What is the meaning of foreign exchange base currency? Definition of base currency Hello, the so-called "base currency" for foreign exchange speculation is not the base currency in monetary policy, but the first currency in any currency pair. The exchange rate shows the value of the first currency relative to the second currency. Let's give an example. If the exchange rate of USD/CAD is 1.0862, it means that 1 USD equals 1.0752 USD. In the foreign exchange speculation market, the US dollar is generally regarded as the base currency in the quotation, which means that all quotations indicate how many other currencies 1 US dollar equals. But in the foreign exchange market, the pound, euro, Australian dollar and New Zealand dollar are exceptions.
At present, the eight most frequently traded currencies are called major currencies, namely USD (US dollar), EUR (Euro), GBP (British pound), CAD (Canadian dollar), JPY (Japanese yen), NZD (New Zealand dollar), CHF or SFR (Swiss franc) and AUD (Australian dollar). All other currencies are called secondary currencies. At present, the foreign exchange market mainly analyzes five currencies: US dollar, Japanese yen, British pound, euro and Swiss franc. These currencies are the most liquid in the world and the most suitable for trading.
Question 3: The definition of base currency, also known as strong currency, has a direct impact on the money supply. Of course, the reserve is the base currency, and the base currency is the currency with the ability to expand deposits (the key is whether it has this ability), but it is not necessarily expanding. Once the central bank reduces the reserve ratio, the reserve outflow will expand. I don't know if you understand this.
Question 4: What is the base currency? Base money Base money, also known as monetary base, strong money and initial money, is also called high-power money because of its ability to double or shrink the total money supply. It is a debt certificate issued by the central bank, which is manifested in the deposit reserve of commercial banks (R) and the currency held by the public (C). Theoretically speaking, money supply is the product of base money and money multiplier. Base currency, also known as strong currency or high-energy currency, refers to the sum of cash held by the public in circulation and banking system reserves (including statutory deposit reserve and excess reserve). As the foundation of deposit expansion and money creation in the whole banking system, the quantity of base money has a decisive influence on the total money supply.
Question 5: The concept and relationship between foreign exchange holdings and base currency. Thank you very much for your answers, which gave me a clear concept. But sorry, I asked another question in the comments I answered. Come back and answer when you are free. In addition, according to your answer, I still have an idea, I don't know if it's right-under the expectation of RMB appreciation, a large amount of foreign exchange poured into China, resulting in the increase of the base currency, which in turn contributed to inflation, but inflation is usually the factor leading to currency depreciation, so didn't these speculators who expected RMB appreciation lead to their own failure?
Question 6: What is the base currency? The base currency includes. The base currency, also known as high-energy currency or powerful currency, is the core and fundamental part of the money supply, which consists of cash currency in circulation and the total reserve of the banking system.
The base currency has the following characteristics.
It is the debt of the central bank, highly liquid and the most active part of all currencies. It is derivative and can produce several times its own currency. With controllability, the central bank can control the money supply through control.
The base currency mainly includes cash on hand, reserve deposits and cash held by the public. Base currency = various deposit reserves+cash+statutory reserves+excess reserves+cash on hand in the banking system+cash held by the public.
Question 7: Composition of the base currency The base currency consists of four parts: statutory reserve, excess reserve, cash on hand and cash held by the public outside the banking system. The formula is:
Base currency = statutory reserve+excess reserve+cash on hand in the banking system+cash held by the public.
Question 8: The base currency of China consists of (). The basic currency of China consists of three parts: the deposit reserve of the People's Bank of China, the cash in circulation and the cash on hand of financial institutions.
The base currency is the basis for the entire commercial banking system to create deposit currency, and it is the source of the multiple expansion of deposits in the entire commercial banking system. From a qualitative point of view, the base currency has several basic characteristics:
First, the monetary liabilities of the central bank, rather than the assets or non-monetary liabilities of the central bank, are supplied by the central bank through its own asset business;
Second, through the influence of variables directly controlled and regulated by the central bank, the purpose of regulating supply is achieved;
Third, the basis for supporting the liabilities of commercial banks. Commercial banks cannot create credit without holding the base currency.
Fourth, under the reserve system, the base currency can be used by the whole banking system and can generate several times its own volume. From the source, the base money is supplied by the central bank through its asset business.