114-0511/04 – International Monetary Relations (IMR)

Gurantor departmentDepartment of EconomicsCredits5
Subject guarantorIng. Karel Hlaváček, Ph.D.Subject version guarantorIng. Karel Hlaváček, Ph.D.
Study levelundergraduate or graduate
Study languageEnglish
Year of introduction2017/2018Year of cancellation
Intended for the facultiesEKFIntended for study typesFollow-up Master, Bachelor
Instruction secured by
LoginNameTuitorTeacher giving lectures
HLA31 Ing. Karel Hlaváček, Ph.D.
MEL044 doc. Ing. Aleš Melecký, Ph.D.
Extent of instruction for forms of study
Form of studyWay of compl.Extent
Full-time Credit 2+0

Subject aims expressed by acquired skills and competences

- To outline fundamentals of international currency markets and explain essential concepts in this area. - To describe relations between exchange rates and interest rates and to clarify their impacts upon spot and forward rates. - To identify major determinants of exchange rates development. - To explain differences among exchange rates regimes in common use and central bank's policy that is implied with their usage. - To define exchange rate risk and its management using currency derivatives. - To analyse structure of balance of payments using an example of the Czech republic.

Teaching methods

Individual consultations


The central themes of the course are selected topics from the international monetary theory as well as from the international financial markets theory. The course is focused on selected topics of theory and practice of international financial markets. The problem areas are: foreign exchange markets, foreign exchange risk and managing of risk through the us of financial derivates, exchange rate modelling and forecasting and balance of payments´ analysis

Compulsory literature:

MOFFETT, Michael H., Arthur I. STONEHILL a David K. EITEMAN. Fundamentals of multinational finance. Ed. 4th. Upper Saddle River: Pearson, c2012. ISBN 978-0-13-282991-5. MADURA, Jeff. International financial management. London: Cengage Learning, 2017. ISBN 978-1473725508. MISHKIN, Frederick, S., The Economics of Money, Banking and Financial Markets. London: Pearson 2015. ISBN 978-0133836790.

Recommended literature:

SHAPIRO, Alan C. Multinational Financial Management. 10th ed., Wiley, 2013. ISBN 978-1118572382. EITEMAN, David K., Arthur I. STONEHILL a Michael H. MOFFETT. Multinational Business Finance. 14th ed., Harlow: Pearson Education Limited, 2016. ISBN 978-0133879872. BYFORD, M., and MANKIW, G. Principles of Macroeconomics: Australian Edition. 6th edition, South Melbourne: Cengage Learning Australia, 2014. 536pp., ISBN 9780170248518

Way of continuous check of knowledge in the course of semester


Other requirements

no special requirements


Subject has no prerequisities.


Subject has no co-requisities.

Subject syllabus:

1. Introduction to foreign exchange markets. - Exchange rates and quotation. - Function and structure of forex markets. - Interbank forex market. 2. Arbitrage and spot transactions. - Arbitrage and speculation. - Types of transactions on forex markets. - Spot transactions. 3. Forward transactions and hedging currency risk. - Covered interest rate arbitrage. - Quotation of forward transactions. - Hedging in forward contracts. 4. Exchange rates. - Types of exchange rates. - Simple model of exchange rate determination. - Equilibrium and stability in a forex market. 5. Currency futures. - Characteristics of futures contracts. - Factors influencing futures‘ markets. - Hedging with futures. 6. Currency options. - Characteristics of currency options. - Value of an option. - Hedging with currency options. 7. Currency swaps. - Characteristics of currency swaps. - Quotation of currency swaps. - Types and process of currency swaps. 8. Exchange rate determination in short range - asset market model. - Demand for a foreign asset. - Difference between interest rates. - Fisher‘s effect. - Uncovered and covered interest rate parity. 9. Exchange rate determination in long range. - Theory of purchasing power parity. - Parity conditions‘ model. 10. Exchange rates management. - Exchange rate regimes. - Theoretical approaches to exchange rates managing. - Currency interventions and their effectiveness. 11. Exchange rate policy in transition economies. - Approaches in an exchange rate management. - Tools of exchange rate policy. - Exchange rate policy in Czech republic. 12. Currency crises. - Reasons of currency crises. - Forecasting models. - Approaches to currency crises‘ solutions. 13. Balance of payments. - Balance of payments‘ categories. - Balance of payments in theoretical models. - Adjusting of balance of payments.

Conditions for subject completion

Full-time form (validity from: 2017/2018 Summer semester)
Task nameType of taskMax. number of points
(act. for subtasks)
Min. number of points
Credit Credit 100  51
Mandatory attendence parzicipation: not specified

Show history

Occurrence in study plans

Academic yearProgrammeField of studySpec.ZaměřeníFormStudy language Tut. centreYearWSType of duty

Occurrence in special blocks

Block nameAcademic yearForm of studyStudy language YearWSType of blockBlock owner
Incoming students - bachelor study 2018/2019 Full-time English Choice-compulsory 163 - International Office stu. block