International settlement first review includes about Capital movement, Balance of Payment, Depreciation and BOT; difference between fixed and floating exchange rates; the free trade and globalizationc affect the Vietnamese capital market. | International Settlement FIRST REVIEW Dr. Nguyen Minh Duc Capital movement Capital market of country A has its demand curve of D and interest r on the left side Capital market of country B has its demand curve of D* and interest r* on the right side Suppose A has 30 mil. USD in its capital, B has 10 mil. USD, represented by the relative supply curve S/S* Interest rate in A is 4% and in B is 12%. r* r S/S* 12% 8% 4% D* 0 D 20 30 K 0* K* Thị trường vốn thế giới Dr Nguyen Minh Duc 2009 2 Capital movement r* r S/S* 12% 8% 4% D* 0 D 20 30 K With mobilized capital flow between 2 countries, the interest rates in the two countries will approach to their equilibrium at 8% 0* K* Thị trường vốn thế giới Dr Nguyen Minh Duc 2009 3 Question How the free trade and globalization affect the Vietnamese capital market? Dr Nguyen Minh Duc 2009 4 Balance of Payment BOT + TS BGS + NII CA + KA = BOP DI + PI Dr Nguyen Minh Duc .
