The Impact of Monetary Policy Announcements on the Australian Foreign Exchange Market

2012 ◽  
Author(s):  
Bronwyn McCredie ◽  
Paul Docherty ◽  
Stephen Andrew Easton ◽  
Katherine Uylangco
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
The Impact

scholarly journals Central bank's communication and markets' reactions: Polish evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Janusz Brzeszczyński ◽  
Jerzy Gajdka ◽  
Tomasz Schabek ◽  
Ali M Kutan
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Financial Market ◽  
Foreign Exchange Market ◽  
Emerging Market ◽  
Public Information ◽  
Exchange Market ◽  
Market Segments ◽  
Content Type ◽  
The Impact

PurposeThis study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging markets.Design/methodology/approachEmpirical analysis is executed using the National Bank of Poland (NBP) announcements about its monetary policy covering the data from the broad financial market in its three main segments: stock market, foreign exchange market and bonds market. The reactions are measured relative to the changes in the NBP announcements and also with respect to investors' expectations. Autoregressive conditional heteroscedasticity (ARCH) models with dummy variables are used as the main methodological tool.FindingsBonds market and foreign exchange market are the most sensitive market segments, while interest rate and money supply are the most influential types of announcements. The changes of the revealed new macroeconomic figures had more impact on assets' prices movements than the deviations from their expectations. Moreover, greater diversity of the Monetary Policy Council (MPC) members' opinions on the voted motions, captured in the MPC voting reports, is associated with more cases of statistically significant NBP communication events.Practical implicationsThe findings have direct relevance for fund managers, portfolio analysts, investors and also for financial market regulators.Originality/valueThe results provide novel evidence about how the emerging financial market responds to monetary policy announcements. They help understand the nature of the impact of public information on financial assets' valuation and on movements of their prices, analysed comprehensively in three market segments, in the emerging market environment.

scholarly journals Role of Oil Prices in Exchange Rate Devaluation: Risks of the Russian Ruble and Other Currencies

2019 ◽  
Vol 16 (4) ◽  
pp. 76-81
Author(s):  
V. Yu. Didenko ◽  
N. I. Morozko ◽  
N. I. Morozko
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Current Account ◽  
Foreign Exchange Market ◽  
Oil Prices ◽  
Balance Of Payments ◽  
Exchange Market ◽  
The Exchange Rate

Subject and topic. Currently, the decrease in payments on foreign debts and a decrease in imports have an impact on the demand in the foreign exchange market. As a result, a situation has arisen due to the actions of the Bank of Russia, caused by threats of sanctions that provoked the absence of excessive demand and adequate supply in the foreign exchange market and led to a decrease in ruble exchange rate fl uctuations due to oil price movements.The subject of research is to determine the role of oil prices in the formation of monetary policy, which can be a key driver of economic growth.Objective. Identifi cation of exchange rate management practices with the search for the relationship between the current account of the balance of payments and the volatility of the national currency exchange rate.Research methods, the main provisions. Methods used grouping, comparing and summarizing economic indicators to study the characteristics and trends of the monetary policy of China, South Korea and Latin American countries.A critical analysis of the various points of view of leading scientists on the negative or positive impact of the exchange rate on the development of the economy was carried out. At the same time, it is interesting to analyze the views of individual economists that the dependence of the ruble exchange rate on oil prices has recently largely decreased.The main results of the study. Determination of the theoretical relationship between the price of oil and the exchange rate, based on the shock component, either in oil prices or in the exchange rate, with testing the response of the economic variable to this shock.Main conclusions. It was concluded that in the conditions of the economic situation of the last decade, the main problem of export-oriented and import-oriented countries is the imbalance of the current account of the balance of payments, as well as its relationship, primarily with the prices of export goods.

scholarly journals Brexit and its Impact on the Pound in the Foreign Exchange Market

2019 ◽  
Vol 16 (1) ◽  
Author(s):  
Keith Pilbeam
Keyword(s):  
Economic Policy ◽  
Foreign Exchange ◽  
Implied Volatility ◽  
Foreign Exchange Market ◽  
Policy Uncertainty ◽  
The European Union ◽  
Exchange Market ◽  
Soft Or ◽  
Economic Policy Uncertainty ◽  
The Impact

Abstract In this paper we outline the impact and likely future impact of Brexit on the pound. We argue that Brexit implies a significant depreciation of the pound and the degree of depreciation required is heavily linked to whether there will be a soft or hard Brexit. We find that the pound has had broadly similar depreciations to date against both the dollar and the euro. Brexit has considerably raised UK economic policy uncertainty and this, in turn, has at times led to an significant increase in future implied volatility of the pound. While there is an overall link between the state of the ongoing Brexit negotiations with the European Union and movements in the pound in the foreign exchange market, the link is not especially strong unless the perception that the negotiations are going badly has exceeded 60%.

scholarly journals How could we observe change of the exchange rate? Review of selected factors of influence on foreign exchange market

Revizor ◽  
2020 ◽  
Vol 23 (91-92) ◽  
pp. 77-85
Author(s):  
Milorad Stamenović ◽  
Sanja Jelisavac-Trošić
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Risk Exposure ◽  
Exchange Market ◽  
Management Measures ◽  
Factors Of Influence ◽  
The Exchange Rate ◽  
The Impact ◽  
Significant Factors

This paper defines the participants in the international foreign exchange market and the influence of natural, political, and economic factors on the movement of the exchange rate, and analysis of circumstances that may contribute to the change of the exchange rate. The paper aims to present the analysis of the exchange rate through macroeconomic phenomena and define the factors influencing the change in the exchange rate and the impact on the work of participants in that process. As risk management measures can prevent the influence of significant factors defined in the paper, measures, and types of risk exposure are determined.

scholarly journals Foreign exchange market pressure index and monetary policy in Iraq

2018 ◽  
Vol 63 (219) ◽  
pp. 61-82
Author(s):  
Ammar Khalaf
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Series Data ◽  
Policy Intervention ◽  
Exchange Market ◽  
Exchange Market Pressure ◽  
Pressure Index ◽  
Market Pressure

This paper?s aims are to adequately measure a foreign exchange market pressure index that can be used to discover pressures in the Iraqi foreign exchange market early on, and to examine the effect of monetary policy intervention in the Iraqi foreign exchange market. The modelling approach used is Autoregressive Distributed Lag (ARDL), with monthly time series data spanning 2013-2017. The index used in this paper was able to identify different periods of pressure in the Iraqi foreign exchange market. In addition, the econometric analysis found that the traditional proxies for monetary policy intervention in the foreign exchange market, such as domestic credit and money multiplier, were ineffective in the case of Iraq. The results show that the Central Bank of Iraq (CBI) relied extensively on foreign reserves to mitigate pressures in the foreign exchange market. Due to the nature of the Iraqi economy and where the main source of foreign currency is oil exports, the CBI adopted a fixed exchange rate regime to control inflationary expectations and stabilize the foreign exchange market.

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