scholarly journals Net foreign assets and the exchange rate: Redux revived

2002 ◽  
Vol 49 (5) ◽  
pp. 1057-1097 ◽  
Author(s):  
Michele Cavallo ◽  
Fabio Ghironi
Keyword(s):  
Exchange Rate ◽  
Net Foreign Assets ◽  
The Exchange Rate ◽  
Foreign Assets

scholarly journals APLIKASI PENDEKATAN KESEIMBANGAN PORTOFOLIO TERHADAP NILAI TUKAR RUPIAH/DOLLAR AMERIKA

2012 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Nurbetty Herlina Sitorus
Keyword(s):  
Exchange Rate ◽  
Balance Model ◽  
Rate System ◽  
Net Foreign Assets ◽  
Portfolio Balance ◽  
Balance Approach ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
The Exchange Rate ◽  
Foreign Assets

Since the adoption of freely floating exchange rate system, the rupiah against the U.S. dollar continues to fluctuate. This has stimulated research on the instability of the rupiah and the factors that influence it. This study aims to analyze the variables that affect the exchange rate using the  portfolio balance approach. The portfolio balance approach is an extension of the monetary theory by incorporating a combination of assets other than domestic currency. The results  of the portfolio balance approach shows some variables that affect the exchange rate are Indonesia’s money supply (broad money), Indonesia’s net foreign assets and United States’ net foreign assets. It was also found that the speed of adjustment of the portfolio balance approach is 60,56. From this finding, it can shows that the portfolio balance model can be a good reference for explaining the movements of Indonesian Rupiah – US dollar exchange rate.

Accounting and Auditing of Assets and Liabilities Used When Conducting Business Abroad

Auditor ◽  
2020 ◽  
Vol 6 (10) ◽  
pp. 17-24
Author(s):  
Yuriy Kochinev ◽  
Natalia Neelova ◽  
O. Sobol'
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Russian Federation ◽  
Foreign Currency ◽  
The Russian Federation ◽  
The Exchange Rate ◽  
The Difference ◽  
Foreign Assets

The relevance of the topic is due to changes in PBU 3/2006 "Accounting for assets and liabilities denominated in foreign currency", according to which, from 01.01.2019, all assets and liabilities denominated in foreign currency used by an organization to conduct business outside the Russian Federation are subject to conversion into rubles at the exchange rate of the Central Bank of the Russian Federation on the reporting date for the purpose of accounting. This raises the question of the mechanism of the difference arising from the results of recalculation of the value of foreign assets and liabilities, and its reflection in accounting. In the work proposed and illustrated by examples of recommendations to address the above-mentioned difference in specially designed for this purpose, the register. It also provides recommendations on accounting for transactions with non-monetary items used in activities outside the Russian Federation, expressed in rubles.

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.

scholarly journals Test of Monetary Approach to Balance of Payments in West Africa Monetary Zone

2020 ◽  
Vol 4 (1) ◽  
pp. 9-17
Author(s):  
Foluso Ololade Oluwole ◽  
John Adebayo Oloyede
Keyword(s):  
Exchange Rate ◽  
West Africa ◽  
Positive Relationship ◽  
Positive Impact ◽  
Negative Relationship ◽  
Rate System ◽  
Net Foreign Assets ◽  
Monetary Approach ◽  
Domestic Credit ◽  
Foreign Assets

This research tested the monetary approach to Balance of Payment in developing countries of West Africa in order to affirm whether the specified relationship in the approach depicts correctly the actual behaviour of the economies. Time series and cross-sectional data that ranges from 1970 – 2016 were used. The empirical results of the fixed effect model established a significant positive relationship between net domestic credit, interest rate and exports; an insignificant positive relationship between capital movements, imports, income and the dependent variable. Exchange rate, however, had a significant negative relationship with the net foreign assets, while inflation had an insignificant but negative relationship with net foreign assets. The pairwise causality tests indicated a unidirectional relationship between exchange rate, net domestic credit and net foreign assets while the other variables move independently and cannot granger cause net foreign assets. Hence, the study concludes that the Polak model is valid in the West Africa Monetary Zone despite the fact that they are no more operating a fixed exchange rate system. The study suggests that the attention of the monetary authorities and the governments should not only be on decreasing the money supply in the economy, since an increase in net domestic credits has a positive impact on the net foreign assets provided it is channeled towards domestic production.

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