scholarly journals Islamic Currency Swap: Can Be The Best Way to Hedge Indonesia Hajj Fund?

2018 ◽  
Vol 6 (2) ◽  
pp. 145
Author(s):  
Irvan Maulana ◽  
Muhammad Rafdi
Keyword(s):  
Saudi Arabia ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Simulation Analysis ◽  
Currency Hedging ◽  
Operational Costs ◽  
Hedging Policy ◽  
Foreign Currencies ◽  
High Volatility ◽  
The Government

The operational costs of Hajj in foreign currencies will always face the risk of changes in exchange rates. Hajj operational costs will continue to grow in line with the increasing number of pilgrims. But at present, the government (BPKH) does not have a currency hedging policy to reduce the risk of fluctuating currency values. Hajj operational costs are saved in rupiah, dollar and riyal currencies. As a result, deposits of pilgrims will continue to be overshadowed by the reduction in value due to the depreciation of the rupiah against the dollar and riyals. Hedging policy is a necessity in the management of Hajj funds. This study will use an Islamic currency swap simulation analysis. According to the MUI DSN No 96 in 2015, a swap is a contract that starts a spot transaction followed by a forward agreement by setting a forward exchange rate. Then it is settled by spot transactions using the agreed forward exchange rate. The results of the study show that the dollar and riyal in 2018 are in a state of high volatility, so hedging is needed to reduce cash outflows. Based on analysis, Islamic currency swap can be the best hedging to the operational costs of Hajj in USD is with tenors 30 days, 180 days, 360 days. while the operational costs of Hajj are in Saudi Arabia Riyal currency, efficient in overnight tenors, 30 days, 90 days and 180 days. 

scholarly journals THE EFFECT OF IMPORT FACILITIES FOR EXPORT PURPOSES, EXCHANGE RATES, AND INFLATION ON EXPORTS OF TEXTILES AND TEXTILE PRODUCTS

2020 ◽  
Vol 2 (2) ◽  
pp. 18-38
Author(s):  
Mohammad Fachrudin ◽  
Indah Puspitasari
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Textile Industry ◽  
Inflation Rate ◽  
Raw Materials ◽  
Export Performance ◽  
Fiscal Incentives ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Government

The Import Facility for Export Purpose (KITE) is the Government's effort to encourage export performance. Companies that receive the KITE facility obtain fiscal incentives and export their product to import raw materials. The textile and textile product (TPT) industry is a strategic industry and has been determined by the Government as a pilot industry in the Roadmap for Making Indonesia 4.0. The textile industry relies on imported raw materials, so that the KITE facility is needed to encourage growth and increase product competitiveness in the international market. This study aims to determine the effect of the KITE facility, the rupiah exchange rate against the U.S. dollar, and the inflation rate on Indonesia's textile exports. We used a sample of 37 industrial textile companies in Indonesia that received the KITE facility  2016 to 2018. This study uses a panel data regression model with independent variables: KITE facility, exchange rates, inflation, and exported dependent variable. The results showed that the KITE facility had a positive and significant effect on the textile industry exports. In contrast, the exchange rate and inflation had a negative and significant impact on Indonesia's textile industry exports. This study's implications for the Government can be used to formulate a national strategy to increase export.

scholarly journals Analisis Keputusan Transfer Pricing Berdasarkan Pajak, Tunneling dan Exchange Rate

2020 ◽  
Vol 20 (2) ◽  
Author(s):  
Hani Sri Mulyani ◽  
Endah Prihartini ◽  
Dadang Sudirno
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Stock Exchange ◽  
Transfer Pricing ◽  
Tax Burden ◽  
Manufacturing Companies ◽  
Pricing Decisions ◽  
Pricing Decision ◽  
The Government ◽  
Positive Effect

Tax has two points of view, for the government tax is a source of state revenue that has the largest contribution, but for tax companies is a burden that must be paid. Often companies do tax planning strategies so that the tax burden that must be borne by the company becomes smaller. Companies usually exploit loopholes from the use of accounting methods allowed by accounting and taxation rules. Transfer Pricing is one of the ways companies take to reduce the tax burden. This study aims to determine and obtain empirical evidence about the effect of tax, tunneling and exchange rates on transfer pricing decisions both partially and simultaneously on manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2013-2017 period. The research method used is descriptive and verification analysis method. The population in this study were 144 manufacturing companies listed on the Indonesia Stock Exchange in the period 2013-2017. Sampling using a purposive sampling method and obtained a sample of 20 companies. The results of this study indicate that partially significant positive effect on transfer pricing decisions, tunneling does not significantly influence the transfer pricing and exchange rate decisions do not significantly influence the transfer pricing decision, but simultaneously the results of this study indicate that taxes, tunneling and exchange rates affect significant to the transfer pricing decision.

scholarly journals An Empirical Evaluation of Exchange Rates Changes: Economic Implications in Oil-Exporting Countries

2019 ◽  
Vol 12 (2) ◽  
pp. 111-126
Author(s):  
Abdullah AbdulRahman
Keyword(s):  
Saudi Arabia ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Current Account ◽  
Inflation Rate ◽  
Exchange Rate Regime ◽  
Signs And Symptoms ◽  
Kingdom Of Saudi Arabia ◽  
Economic Implications ◽  
Spot Exchange Rate

SummarySubject and purpose of work: This paper examines empirical implications of exchange rates in the economy of the Kingdom of Saudi Arabia (KSA). In particular, it aims to identify and evaluate potential macroeconomic signs and symptoms of economic disturbance so as to determine macroeconomic variables that influence spot exchange rate (1GBP = SAR), and to examine how fixed exchange rate regime influences exports and imports in the Kingdom of Saudi Arabia (KSA).Materials and methods: Multiple regression and simple linear regression models were used to analyze the data from 1975 to 2018.Results: The study found a weak and insignificant relationship between spot exchange rate and unemployment rate, inflation rate, exports, and economic growth, along with strong relations with imports, investment, and current account variation in the KSA.Conclusions: The study recommends the adoption of a floating exchange rate regime in the KSA. It has revealed the signs and symptoms of increases of the inflation rate with decreasing exports, increasing imports, decreasing of current account (current account deficit threat), and small increases of investment.

scholarly journals The Effect of Government Bonds, Inflation, And Exchange Rate in Achieving SDGs

2021 ◽  
Vol 5 (2) ◽  
pp. 119-135
Author(s):  
Muhammad Rafi Bakri ◽  
Anastasya Utami
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Path Analysis ◽  
Indirect Effect ◽  
Inflation Rate ◽  
Coefficient Of Determination ◽  
Government Bonds ◽  
Inflation Rates ◽  
The Government

This study aims to examine the effect of bonds, inflation rates, and exchange rates on economic growth to achieve Indonesia's 2030 sustainable development goals, namely reducing government and poverty. This study uses a quantitative regression analysis method with a path analysis approach to determine the direct or indirect effect between variables. The variables used are published values, inflation, exchange rates, economic growth, poverty rates, and poverty in Indonesia in 2016-2020. Based on the path analysis, the coefficient of determination of 60.72% indicates that the diversity of the data of 60.72% can be explained in the model. Government Bonds have a direct and significant effect on the economic growth of -1,243. Government obligations indirectly affect the level of movement and mission of 1,098 and 1,128, respectively. The inflation rate directly affects the rate of economic growth of 0.712. The inflation rate has no direct effect on the movement level and poverty of -0.6294 and -0.6644. The exchange rate has no significant direct or indirect effect on economic growth, movement, and poverty. This study concludes that the government needs to control inflation and inflation so that the economy can be achieved and reduce inflation and poverty. Keywords: Government Bond, Inflation Rate, Exchange Rate, Economic Growth, SDG’s

scholarly journals Unrestricted Vector Autoregressive Modelling of the Interaction among Oil Price, Exchange Rate and Inflation in Nigeria (1981–2017)

2019 ◽  
pp. 1-19
Author(s):  
G. L. Tuaneh ◽  
L. Wiri
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Impulse Response ◽  
Inflation Rate ◽  
National Income ◽  
Oil Price ◽  
Var Model ◽  
Annual Data ◽  
Causality Test ◽  
The Government

The interdependence among oil prices, exchange rates and inflation rates, and their response to shocks, was a cause of concern. Unrestricted Vector Autoregression (UVAR) was employed to analyse this interactions as well as to investigate the pattern of causality among the study variable. Annual data spanning from 1981 to 2017 was sourced from the Statistical Bulletin of the Central Bank of Nigeria. Pre-estimation analysis showed that all variables were integrated of order one 1(1), and there no cointegrating relationship. The inverse root of AR characteristic polynomial showed a stable VAR model. All lag length selection criteria chose a lag length of 1. The UVAR estimates and the test of significance particularly the granger causality test indicated significant influence and uni-directional effect from oil price to exchange rates. The Wald statistics, showed significant own shocks, and the impulse response showed that all variables were instantaneously affected by own shocks. Exchange rate was instantaneously affected by oil price; however, it ruled out the response in inflation rate to contemporaneous shocks in oil price. The variance decomposition further showed that at least 93.1%, 97.1% and 92.4% of the impulse response in oil price, exchange rate, and inflation rate respectively were from own shocks in the long run. The post estimation analysis showed that the VAR model was multivariate normal, the residual was homoscedastic, and there was no serial autocorrelation. It was recommended that the government should diversify the national income stream and consider policies that will control inflation.

scholarly journals External Debt and its Impact on Exchange Rates in the Philippines

2022 ◽  
Vol 4 (1) ◽  
pp. 93-103
Author(s):  
Mikayla Mendoza ◽  
Andrew Gonzalez
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
External Debt ◽  
Negative Relationship ◽  
The Philippines ◽  
Debt Management ◽  
Foreign Reserves ◽  
The Exchange Rate ◽  
The Government ◽  
The Impact

The exchange rate is a crucial macroeconomic factor within emerging and transition economies. External debt is a driving force for the growth of an economy. This study then aims to determine the impact of external debt on the exchange rate of the Philippines by examining the impact of external debt accumulation on the Philippines' exchange rates. The researcher applies a correlational time series analysis in order to capture the impact of external debt, debt services on external debt, and foreign reserves on the exchange rate of the Philippines within the period from 1980 to 2019. The relationships between variables based on the developed theoretical framework are analyzed through multiple regression analysis. Empirical results show that external debt and debt services positively impact the exchange rate, while foreign reserves exhibit a negative relationship. The corresponding coefficients indicate that a change in any of the independent variables will cause significant but marginal fluctuations in the exchange rate in the case of the Philippines. The author concludes that external debt encourages the growth of exchange rates in the long run in the case of the Philippines due to its positive relationship. This implies that the Philippine government should aim to focus on more efficient external debt management strategies to enhance the value of the exchange rate of the Philippine Peso relative to other countries. Accordingly, the researcher recommends that the government take the necessary means to reduce the country's external debt to better the economy.

scholarly journals FENOMENA KURS RUPIAH SEBELUM DAN SELAMA COVID-19

NIAGAWAN ◽  
2020 ◽  
Vol 9 (3) ◽  
pp. 197
Author(s):  
Pebri Hastuti ◽  
La Ane ◽  
Melati Yahya
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Quantitative Methods ◽  
The United States ◽  
Wilcoxon Test ◽  
The Us ◽  
Us Dollar ◽  
The Exchange Rate ◽  
The Government ◽  
The Impact

The COVID-19 pandemic was first announced by the government on March 2, 2020. COVID-19 has caused many impacts on various economic sectors in Indonesia. Not only in Indonesia but the impact of Covid-19 has disrupted world economic chains. In fact, it has the potential to cause an economic crisis in a number of countries if it is not dealt with quickly and appropriately. Especially in the exchange rate of the rupiah against the United States of America (US) which is increasingly weakening. This study aims to determine differences in the rupiah exchange rate before and during the co-19. The author uses library research instruments, documentation studies, internet browsing, where the data taken is secondary data from relevant agencies obtained from Bank Indonesia publications through Jakarta Interbank Spot Dollar Rate (Jisdor) data, data obtained from Jisdor is the rupiah exchange rate against the US dollar. This study uses quantitative methods with data analysis tools used are different test methods namely Wilcoxon Test with the help of the computer program SPSS Version 21. Where the data is taken from 7 November 2019 to 28 February 2020 before Covid-19 and during Covid-19 on March 2 until June 30, 2020. The method aims to find out significant differences between the rupiah exchange rates before and during the pandemic. The results of data processing showed that there were significant differences between the rupiah exchange rates before and during the pandemic. So it can be concluded that the spread of Covid-19 in the community will further weaken the exchange rate of the rupiah against the US Dollar.

scholarly journals The Dynamics of the Exchange Rate and Extension of Monetary Trilemma

2020 ◽  
Vol 5 (1) ◽  
pp. 27-49
Author(s):  
Mahmoud Allahyarifard ◽  
Mostafa Karimzadeh ◽  
Mohammad Ali Falahi ◽  
Ali Akbar Naji Meidani
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Banking System ◽  
Government Expenditures ◽  
General Level ◽  
External Imbalances ◽  
The Exchange Rate ◽  
The Government ◽  
Foreign Assets

Simultaneous making policy of interest rates, exchange rates and capital accounts can be extended to trilemma theory, contrary to its earlier theories, provided that the imbalances of the private sector, the government and the capital account adjusted through the policy variables such as the government expenditures, the interest rates on domestic deposits, the interest rates on domestic loans, effective exchange rates, foreign prices and foreign interest rates. On the other hand, the components of the extension of trilemma theory in the form of internal and external imbalances affect the exchange rate. In other words, if the real sector markets of the economy are not cleared through the aforementioned trilemma components, and policy variables, internal and external imbalances will be affected by opposite direction of net domestic assets (ΔNDA) and net foreign assets (ΔNFA) of the banking system. This is in accordance with the fundamental principles of the monetary approach balance of payments and exchange rate. Policy variables do not put pressure on the unofficial exchange rate as long as they have the same effect on the net changes in the domestic and foreign assets of the banking system. The purpose of this study is to consider the effect of internal and external imbalances on exchange rate through the simultaneous equations system, generating impulses in policy variables, and examining reactions in Iranian economy. In this paper, the monetary exchange rate determination model is analyzed and examined by using the extension of trilemma theory for macroeconomic data of Iran in the form of internal and external imbalances. The results of this study suggest that policy variables can stabilize the unofficial exchange rate (with other conditions being constant) through trading off internal and external imbalances. Thus, the economic policymaker can, while independently policing interest rates, capital accounts and government expenditures and other policy variables in this research, maintain exchange rate stability as a strategic variable and anchor the general level of prices.

The Relationship Between Stock Prices and Exchange Rates

2017 ◽  
pp. 171-185 ◽  
Author(s):  
Oguzhan Aydemir ◽  
Banu Demirhan
Keyword(s):  
Saudi Arabia ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Granger Causality ◽  
Stock Prices ◽  
Causality Analysis ◽  
Mena Countries ◽  
Local Currency ◽  
Panel Granger Causality ◽  
The Relationship

The relationship and causality between stock prices and exchange rates has preoccupied the minds of economists, investors and policy makers for a long time. However, the relationship or the direction of causality between these two variables still remains unresolved in both theory and empirics. This study examines panel Granger causality relationship between stock price and exchange rate for selected six MENA countries (Bahrain, Lebanon, Morocco, Pakistan, Qatar, and Saudi Arabia) over the period of 2005:01 and 2013:12. Panel DOLS and FMOLS methods are used to estimate long-run coefficients. On the other hand, panel based error-correction model is used to perform causality analysis. The findings of FMOLS and DOLS methods indicate that the appreciation of local currency in Bahrain, Lebanon, Morocco, Pakistan and Qatar leads to a reduction in stock prices. Contrary, in Saudi Arabia, the appreciation of local currency increases stock prices. Panel Granger causality analysis shows that there is a unidirectional causality from exchange rate to stock prices in MENA countries.

Affine Models of the Joint Dynamics of Exchange Rates and Interest Rates

2010 ◽  
Vol 45 (5) ◽  
pp. 1341-1365 ◽  
Author(s):  
Bing Anderson ◽  
Peter J. Hammond ◽  
Cyrus A. Ramezani
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Term Structure ◽  
Exchange Rate Volatility ◽  
Factor Models ◽  
Joint Dynamics ◽  
High Volatility ◽  
Market Approach ◽  
Pricing Kernels

AbstractThis paper extends the affine class of term structure models to describe the joint dynamics of exchange rates and interest rates. In particular, the issue of how to reconcile the low volatility of interest rates with the high volatility of exchange rates is addressed. The incomplete market approach of introducing exchange rate volatility that is orthogonal to both interest rates and the pricing kernels is shown to be infeasible in the affine setting. Models in which excess exchange rate volatility is orthogonal to interest rates but not orthogonal to the pricing kernels are proposed and validated via Kalman filter estimation of maximal 5-factor models for 6 country pairs.

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