The Impact of Foreign Currency Derivatives on Monetary Policy Exchange Rate Channel in China

2014 ◽  
Author(s):  
Wen Si
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Currency ◽  
Currency Derivatives ◽  
The Impact

scholarly journals Real Time Data

2018 ◽  
Vol 4 (3) ◽  
pp. 147
Author(s):  
Arlind Rama ◽  
Ilir Vika
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Currency ◽  
Developing Economies ◽  
Exchange Rate Volatility ◽  
Economic News ◽  
Economic Fundamentals ◽  
Us Dollar ◽  
The Impact ◽  
Exchange Rates Volatility

Interpretation of exchange rate volatility in the light of economic fundamentals comprises an issue of interest for policymakers when it comes to implementing the monetary policy. Understanding the impact of economic news on the Lek exchange rate against two main hard currencies, Euro and US dollar, would serve to better orient the monetary policy and forex market agents positioning in time. Exchange rates volatility on economic news in short-term is an often discussed phenomenon in the economic literature, but through this material we tend to measure these effects in the Albanian foreign currency market and contribute in the literature interpreting foreign currency markets volatility in developing economies. Very often, domestic foreign exchange movements are attributed to developments in large international markets. In the case of Albanian Lek volatility analysis, we tend to find answers regarding the importance of economic news coming from the two main economies in focus, Eurozone and the US. Furthermore, we investigate the importance of the economic information flow in Albania in determining the Lek exchange rate against Euro and US dollar. For a period in focus from January 2007 until July 2012, we try to understand if the exchange rate volatility has been a result of economic fundamentals or financial markets stress related economic news.

Impact of external currency exposures on macroeconomic policies

2020 ◽  
pp. 23-40
Author(s):  
I. V. Prilepskiy
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Positive Impact ◽  
Exchange Rate Regime ◽  
Macroeconomic Policies ◽  
Panel Regressions ◽  
Financial Account ◽  
Currency Exposure ◽  
Cross Country ◽  
The Impact

Based on cross-country panel regressions, the paper analyzes the impact of external currency exposures on monetary policy, exchange rate regime and capital controls. It is determined that positive net external position (which, e.g., is the case for Russia) is associated with a higher degree of monetary policy autonomy, i.e. the national key interest rate is less responsive to Fed/ECB policy and exchange rate fluctuations. Therefore, the risks of cross-country synchronization of financial cycles are reduced, while central banks are able to place a larger emphasis on their price stability mandates. Significant positive impact of net external currency exposure on exchange rate flexibility and financial account liberalization is only found in the context of static models. This is probably due to the two-way links between incentives for external assets/liabilities accumulation and these macroeconomic policy tools.

The influence of inflation targeting on the pass-through effect of the exchange rate

2018 ◽  
pp. 70-84
Author(s):  
Ph. S. Kartaev ◽  
Yu. I. Yakimova
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Policy Regime ◽  
Short And Long Term ◽  
The Exchange Rate ◽  
Pass Through ◽  
The Impact

The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

Monetary Policy in the Conditions of Influence of Negative Factors of the World Economy

2019 ◽  
Vol 7 (1) ◽  
pp. 8-13 ◽  
Author(s):  
Ольга Николайчук ◽  
Olga Nikolaychuk ◽  
Д. Кадырова ◽  
D. Kadyrova
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
World Economy ◽  
Exchange Rate Regime ◽  
Global Market ◽  
Energy Prices ◽  
Consumer Prices ◽  
The World ◽  
The Impact ◽  
Negative Factors

The article analyzes the monetary policy in the context of exogenous shocks of the external sector. The Bank of Russia and Rosstat use official statistics for 2000–2018. The parameters of the action of negative factors of the world economy apply the conditions of world trade and changes in the exchange rate of national currencies. The graphic form analyzes the susceptibility of macroeconomic indicators to changes in the external market and their dependence on fluctuations in energy prices. The influence of consumer prices and inflation on the monetary policy of the Central Bank is considered. The analysis allows us to conclude about the relationship of the effect of events from processes in the global market. It was concluded that, despite these risks, there are optimal ways of conducting monetary policy, which remain the targeting of inflation and the effect of the floating exchange rate regime of the national currency. For effective results in reducing the dependence of macroeconomic processes on the impact of external shocks, coordinated activities of all branches of economic power, and their effective macro-prudential and fiscal policies are important.

Foreign Currency Derivatives and Foreign Exchange Rate Exposure Management of KOSDAQ Firms

2013 ◽  
Vol 21 (2) ◽  
pp. 223-254
Author(s):  
Taek Ho Kwon
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Foreign Exchange Rate ◽  
Sufficient Evidence ◽  
Similar Data ◽  
Test Results ◽  
Crisis Period ◽  
Exchange Rate Exposure ◽  
Currency Derivatives

This study examines the foreign currency derivatives trading of KOSDAQ firms and analyses the relations of derivatives trading and foreign exchange rate exposure in the period 2005~2010. The amount of derivatives trading reaches 27.7% of total assets for the trading firms before global financial crisis period (2005~2007). While, the amount decreases to 17.6% of total assets during the crisis period (2008~2010). These amounts are much greater than those of KOSPI firms which are calculated using similar data specification and periods. The variables which are usually adopted as determinants of derivatives trading do not explain the usage of derivatives in the analysis of period 2005~2007. These results suggest that KOSDAQ firms use derivatives not only foreign exchange risk managements but also trading purposes during this period. Test results do not show sufficient evidence that KOSDAQ firms use derivatives trading in an effective manner to manage foreign exchange rate exposure. In sum, test results suggest that to achieve the goal of managing foreign exchange rate exposure firms should estimate their open position in foreign currency properly before conducting foreign currency derivatives trading.

scholarly journals PERANAN KEBIJAKAN MONETER DALAM MENJAGA STABILITAS PEREKONOMIAN INDONESIA SEBAGAI RESPON TERHADAP FLUKTUASI PEREKONOMIAN DUNIA

2007 ◽  
Vol 9 (2) ◽  
pp. 145-177
Author(s):  
M. Maulana Al Arif ◽  
Achmad Tohari
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Open Economy ◽  
Small Open Economy ◽  
Monthly Data ◽  
Vector Autoregressive ◽  
The World ◽  
The Exchange Rate ◽  
The Impact

This paper analyzes the impact of the inflation and the world interest rate on the Indonesian economy and the effectiveness of the Indonesian central bank policy to adopt the domestic macroeconomic fluctuation.Assuming Indonesia as a small-open economy, the Stuctural Vector Autoregressive Model is utilized on the monthly data during the periode of 1999: 1 – 2004: 12 covering the main domestic macroeconomic indicator (output, price, money supply, interest rate and the exchange rate) and the world oil price and world interest rate as the disturbance source.The analysis provides 2 main results, first, the international variables do have impacts on the domestic variables fluctuation, implying the fragility of the domestic economy due to the external shock, second, the monetary policy is effective on supporting the economic growth and stabilizing the price level. However, the Bank Indonesia policy to stabilize the international shock via the exchange rate channel, contributes to a higher impact of the international shock on domestic interest rate.Keywords: monetary policy, business cycle, SVARJEL Classification: E52, E32, C32, F41

scholarly journals Optimality of Morocco’s Currency Basket

2019 ◽  
Vol 2 (2) ◽  
pp. 97
Author(s):  
AZZOUZI Asmae ◽  
BOUSSELHAMI Ahmed
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Foreign Currency ◽  
Financing Constraints ◽  
External Financing ◽  
Local Currency ◽  
Optimal Weights ◽  
Monetary Authorities ◽  
The Stability ◽  
The Impact

<p><em>The objective of this article is to analyze the behavior of the monetary authorities of Morocco in the readjustment of the official weights of anchor currencies in Dirham basket on April 13, 2015. To do this, we are taking into account the objective of the external financing constraints for comparing, with different scenarios, the optimal weights with the implicit weights of the currencies. Such a comparison proves that the authorities take more into consideration the structure of the commercial exchanges than that of the debt for the choice of the optimal weight of the anchor currency. In the final part of the paper, we have delved deeper into this issue by proposing a detailed sectoral study to examine the impact of the exchange rate on the trade balance for each activity sector. Our intention is to find out which foreign currency seems more volatile against the local currency in order to lead the economy to manage the stability of dirham by increasing its weight in the basket. As a result, the higher price elasticity of the Dollar against the dirham encourages Moroccan monetary authorities to increase its weight in the basket. </em></p>

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