Discussion Board Forum 3 Thread Chapters 5-6
Definition of Term:
Foreign Exchange (FX) Market: Is a physical and virtual institutionalized structure through which the currency of one country is exchanged for the currency of another country, know as the exchange rate (Satterlee).
The Foreign Exchange Market is an electronic platform and trading place for world currencies. Foreign Exchange or FX is the most actively trade market in the world, and the volume that is traded exceeds global trading volumes by 25 times. The make up of the currencies is represented from every country.
“The foreign exchange market is the most actively traded market in the world” (W.S.J, 2018). This form of electronically exchanging between banks and other markets allow the rule of supply and demand. These investment opportunities permit transactions for profit. This lead to profit leads to the major functions of conversion, hedging, arbitrage, speculation. Thus, allowing International trade, stabilization, and helped to “regulate quantity and growth rate of nations money supply” (L.U.) The currency with the largest strengths is the USD. The USD is the strongest and most trusted fallback currency in comparison to other countries. Discussion Board Forum 3
South Asian Association for Regional Cooperation (SAARC) is an international organization established in 1985 by Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka to promote cooperation; cultural, economic and personal development of Asian nations; and mutual assistance between member nations. Afghanistan has become the eight-member nation.
The article “Is SAARC Doomed” talks about how India is changing its focus from SAARC to BINSTEC for various reasons. India is fed up with dealing with Pakistan and how they are running things with SAARC. Its states how there have been a problem with Pakistan and India with the terrorism, nuclear issues since they merged and over the years it has not changed. The article also talks about how India had a meeting with the seven-member states security chiefs of the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) without inviting SAARC. Pakistan is refusing any integration of SAARC and has also pulled out of the SAARC safelight projects. Pakistan has frustrated other members of the organization several times now and it show with the recent boycott of the SAARC summit that was supposed to be hosted by Pakistan. Also, Pakistan has been very hostile to other member states. With the inflexibility of Pakistan and opposition to India limits the ability of SAARC to achieve anything worthwhile in the region.
The question is what is SAARC going to do if Pakistan continues to have a poor atatude towards its other members that want peace? India is looking to make a strategic move by going into the BIMSTEC, that way they will not be treated poorly and it also provides them to merge with the other members that are thinking of separating from SAARC. This will highly effect Pakistan and will greatly improve the demographic and economic factors in BIMSTEC. This capacity of the Indian market and military will be a key factor in the future for the Bay of Bengal region given the security challenges ahead. Unless Pakistan starts to rethink its strategy in SAARC.