How Big Are the Second Round Effects of the Exchange Rate Depreciation Transmitted via Consumer Price Inflation to Average Wage Settlements?

2019 ◽  
pp. 37-48
Author(s):  
Eliphas Ndou ◽  
Nombulelo Gumata ◽  
Mthokozisi Mncedisi Tshuma
Keyword(s):  
Exchange Rate ◽  
Average Wage ◽  
Price Inflation ◽  
The Exchange Rate ◽  
Exchange Rate Depreciation

scholarly journals The Predominance of Balance Sheet Effect versus Competitiveness Effect of Exchange Rate on Brazilian Companies

2020 ◽  
Vol 12 (12) ◽  
pp. 107
Author(s):  
Maria Paula Vieira Cicogna ◽  
Rudinei Toneto Jr ◽  
Mauricio Ribeiro do Valle ◽  
Wilson Tarantin Junior
Keyword(s):  
Exchange Rate ◽  
Foreign Currency ◽  
Balance Sheet ◽  
International Market ◽  
Descriptive Statistics ◽  
Negative Effect ◽  
The Exchange Rate ◽  
Econometric Tests ◽  
Foreign Currency Debt ◽  
Exchange Rate Depreciation

The present research argues that the depreciation of the exchange rate has a negative effect on the balance sheet of Brazilian companies with debt in foreign currency. This effect is mainly on commodity exporters, since it is the class of companies with the highest indebtedness in the international market, as showed by the results. At the same time, companies with foreign currency debt showed a reduction in their investments in moments of depreciation of the exchange rate, which indicates the predominance of the balance sheet effect. The conclusions of the study were obtained through descriptive statistics and econometric tests (panel data) to analyze the effect of foreign currency debt and the exchange rate on investment rate. It was verified that the balance sheet effect generated by the exchange rate depreciation is predominant when compared to the competitiveness effect from 2003 to 2015.

Empirical Investigation of the Effects of the Fundamentals on the Exchange Rate

2005 ◽  
pp. 83-110
Author(s):  
Juan R. Castro
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Empirical Investigation ◽  
Negative Relationship ◽  
Foreign Reserves ◽  
Target Zone ◽  
Monthly Data ◽  
The Exchange Rate ◽  
Interest Differential ◽  
Exchange Rate Depreciation

This paper examines, by using several econometric techniques, the effects of foreign reserves and other fundamental variables on the exchange rate using the target zone theory. This paper uses monthly data for Chile from January 1979 to November 1997. The data used consists of foreign reserves, credit from the Central Bank, domestic reserves, imports, exports, claims on government, GDP, foreign liabilities, domestic and foreign interest rate. We find that the interest differential does not have any effect on depreciation, rejecting the target zone implication that the domestic interest rate can be used to manage the exchange rate. We find that foreign reserves support the exchange rate by reducing the exchange rate depreciation, and the exchange rate and foreign reserves follow a negative relationship, which supports the assumption that increasing the foreign reserves appreciates the exchange rate.

scholarly journals The UK Economy: Forecast Summary

2018 ◽  
Vol 244 ◽  
pp. F2-F2
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Economic Performance ◽  
Government Spending ◽  
List Type ◽  
Price Inflation ◽  
Bank Rate ◽  
Fiscal Adjustment ◽  
The Uk ◽  
Exchange Rate Depreciation

We have revised lower our GDP forecast for 2018 to just under 1.5 per cent mainly due to weak performance in the first quarter. But the slowdown is likely to be temporary.The Commentary in this Review builds a case for higher government spending. We have, as a result, allowed for higher total managed expenditure resulting in a somewhat slower fiscal adjustment than presently planned.Following the exchange rate depreciation of June 2016, annual consumer price inflation peaked at 3.1 per cent in November 2017 and is forecast to ease back to the target rate of 2 per cent over the next eight quarters.Because of the dip in economic performance we expect the timing of our next increase in Bank Rate to be delayed to August but reiterate that the MPC should remain on a gentle path of monetary policy normalisation.

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