1. What are the current exchange rate regimes of the BRIC economies?
2. Why has Brazil changed its exchange rate regime over the years?
3. What variable affects the Russian ruble?
4. By how much did the yuan appreciate against the dollar on July 21, 2005?
5. How has the yuan's appreciation since July 21, 2005, affected the U.S. trade deficit with China?
6. How did the crawling-peg system in place from 2005 to 2008 likely affect inflows of hot money to China? To affect the PBOC's ability to control the money supply and inflation?
7. What is the likely reason for the Chinese government again fixing the yuan to the dollar upon the outbreak of the global economic crisis?
8. Why has China adopted capital controls?
9. Why will China probably relax its capital controls eventually?

Since the collapse of Bretton Woods, a critical question facing governments, particularly emerging economies, is the choice of exchange rate regimes. While most OECD economies have floating rates and capital mobility or are in the Eurozone, emerging countries have generally selected different exchange rate regimes. Many emerging economies have a ''fear of floating,'' a resistance to allowing market forces to freely determine their exchange rate since they fear that speculation or overvaluation may lead to excessive volatility that could contribute to financial crises and discourage trade and investment. Lack of transparency, thin markets, poor policy, low institutional credibility, and sometimes distrust of perfectly free markets have fueled their reluctance to float. The BRICs (Brazil, China, India, and Russia) represent four important and rapidly growing economies. Exhibit 3.5 plots their exchange rates from 2000-2012.
The different paths each nation's exchange rate has taken reflects their different currency regime choices.