The Iranian Foreign Exchange Policy And The Black Market for Dollars

1992 ◽  
Vol 24 (1) ◽  
pp. 101-125 ◽  
Author(s):  
M. Hashem Pesaran
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Debt ◽  
Black Market ◽  
Exchange Rate Policy ◽  
Official Exchange Rate ◽  
The Face ◽  
Rate Policy ◽  
The Government ◽  
Oil Revenues

As a result of the oil price shocks, the 1979 revolution, and the eight-year war with Iraq, fundamental changes have taken place in Iran's foreign exchange position as well as in its exchange rate policy. The viable data over the period 1979–1980 to 1988–1989 clearly show that, despite the revolutionary rhetoric, very little has been done to reduce the country's dependence on oil exports as a source of foreign exchange and government revenues. Instead, in the face of falling oil revenues and the country's increasing international isolation, coupled with the regime's unwillingness to incur foreign debt, the government has adopted a severe ‘import compression’ policy through selective tariffs and quotas, strict control of private and government imports by means of import licenses, and the imposition of foreign exchange allocations on government agencies. The result has been an ever-rising premium on the U.S. dollar in the ‘black’ market, a highly overvalued official exchange rate, a substantial increase in rent-seeking activities at the expense of production, a severe misallocation of resources, and loss of output and industrial capacity.

scholarly journals Exchange rate policy, growth, and foreign trade in China

2011 ◽  
Vol 56 (190) ◽  
pp. 103-139 ◽  
Author(s):  
Mirjana Gligoric
Keyword(s):  
Exchange Rate ◽  
Foreign Trade ◽  
Foreign Exchange ◽  
Global Economy ◽  
Trade Deficit ◽  
Exchange Rate Policy ◽  
Negative Effects ◽  
Bilateral Relations ◽  
The Usa ◽  
Rate Policy

This paper analyzes a hot topic: the influence of an undervalued currency on macroeconomic variables - primarily on the economic growth and trade balance of a country, but also on employment, foreign exchange reserves, competition, and living standards. It also reviews and explains the consequences of yuan undervaluation, points out the need for its appreciation, and states the negative effects that stem from this measure. Special attention is given to the problematic bilateral relations between China and the USA and the reasons why Americans are worried about the exchange rate policy that China implements. Although yuan appreciation would decrease the American foreign trade deficit, it also raises the question of further financing of the American deficit. There are also other problems that the possible appreciation would cause for the American economy, due to the effect of J-curve, passthrough, larger costs of input imported from China, etc. Therefore, Chinese foreign exchange policy is an important subject, but it is not the solution to the problems of the global economy - which have deeper roots than that. However, there is no excuse for China implementing unfair exchange rate policies, or replacing such policies with controversial protectionist policies (as some authors have suggested).

scholarly journals Exchange Rate and Demand for Money in Nigeria

2015 ◽  
Vol 7 (2) ◽  
pp. 21
Author(s):  
BigBen Chukwuma Ogbonna
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Money Demand ◽  
Black Market ◽  
Easy Access ◽  
Market Exchange ◽  
Demand Model ◽  
Demand For Money ◽  
Official Exchange Rate

<p>This study is designed to examine empirically the impact of exchange rate on the stability of demand for money in Nigeria where official and black market exchange rates operate side by side due to exchange controls. Variants of money demand model are estimated using monthly data for the period of 2005-2013. Cointegration and system equation techniques combined with CUSUM and CUSUMSQ tests are employed in the data analysis. Results indicate that in all the variants of the money demand model, coefficients of exchange rates variable (official or black market exchange rates) manifest significant <em>t</em> statistics, meaning that the null hypothesis of restricting the coefficients of exchange rates in money demand model in Nigeria is rejected for each variant. This suggests that coefficient of exchange rates variable (OMEXR or BMEXR) belongs to the cointegrating space in all the instances. Judging from the freakiness of the coefficients of the variants of the money demand function and the results of the tests for stability of the models combined, the most appropriate  demand for money function for Nigeria appear to be the one that includes M1, the interest rate, inflation rate, and official exchange rate. This implies that in Nigeria, a greater percentage of the foreign exchange demand may be public sector driven and substantial percentage of the private sector foreign exchange needs is sourced from the official exchange rate market due to the substantial disparity between the two rates. This may mean consumers’ easy access to official exchange rate and transparency in the operation of official exchange rate market in Nigeria.</p>

Producing dynamic growth is the task ahead

1996 ◽  
Vol 5 (1) ◽  
Author(s):  
Jeffrey Sachs
Keyword(s):  
Exchange Rate ◽  
Western Europe ◽  
Market Access ◽  
Pension Reform ◽  
Exchange Rate Policy ◽  
Economic Policies ◽  
Flexible Labor ◽  
Rate Policy ◽  
The Government ◽  
Export Industries

The first stage of transition in the Czech Republic is over. This country has a market economy and it is working. The second stage of transformation is the rapid catch-up with Western Europe. The main steps may be following: The first involves macro-economic policies, especially exchange rate policy. Exchange rate policy should be managed consistently to protect the competitiveness of export industries. The second item is tax policy. The government spending should be compatible with the level of development and the level of income - it should be in the order of 25 - 30 %. Pension reform. Flexible labor markets. Market access. Infrastructure. Transport, communications.

Argentine elections will drive monetary expansion

2015 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Policy Framework ◽  
Close Monitoring ◽  
Exchange Market ◽  
Content Type ◽  
Official Exchange Rate ◽  
The Government ◽  
Nominal Anchor ◽  
Monetary Policy Framework

Subject The Central Bank's 2015 monetary programme. Significance The Central Bank's (BCRA) 2015 monetary programme indicates that the main features of the current monetary policy framework -- characterised by an expansionary bias, foreign exchange controls and close monitoring of the informal exchange market -- will continue this year. Impacts The government will prioritise exchange rate stability, at the expense of economic activity. The BCRA will continue using the official exchange rate as a nominal anchor. Foreign exchange controls may be extended to discourage devaluation expectations and to protect international reserves.

scholarly journals Yemen: Exchange Rate Policy in the Face of Dwindling Oil Exports

2007 ◽  
Author(s):  
Saade Chami ◽  
Faisal Ahmed ◽  
Nabil Ben Ltaifa ◽  
Todd Schneider
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Policy ◽  
Oil Exports ◽  
The Face ◽  
Rate Policy

scholarly journals Macro-economic Policies and Energy Security—Implications for a Chronic Energy Deficit Country

2014 ◽  
Vol 53 (3) ◽  
pp. 255-273
Author(s):  
Inayat U. Mangla ◽  
Jamshed Y. Uppal
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Energy Security ◽  
Capital Expenditure ◽  
Macroeconomic Policy ◽  
Volatile Oil ◽  
Jel Classification ◽  
Exchange Rate Policy ◽  
Energy Deficit ◽  
Rate Policy

The paper assesses the energy sector’s foreign exchange requirements for meeting energy consumption and for capital expenditures, and identifies its implications for the country’s macroeconomic policy and management. We develop a conceptual model for projecting the energy sector’s long-term requirements for foreign exchange. The model indicates that the country’s chronic dependence on oil imports is likely to expose the economy to high and volatile oil prices. A fundamental issue for Pakistan is how the energy projects requiring large inflows of foreign capital and technology will be financed. The main implication of our analysis is that there will be continuing pressure on the country’s foreign exchange resources. The demand for foreign exchange by the year 2024-25 is projected to be US$ 20-21 billion without the FDI in new power generation. However, when we include the requirements of foreign exchange for capital expenditure, the total FX requirements are in the range of US$ 23- 24 billion. An implication of the country’s chronic energy deficiency is that the macroeconomic policies, particularly the foreign exchange rate policy, need to be redefined to reflect the projected demands on hard currencies and their expected scarcity value. It is likely that Pakistan will remain dependent on foreign imports to meet its energy requirements for a long time and will need to generate commensurate foreign exchange resources to ensure longterm energy security. JEL classification: E66, F37, Q43 Keywords: Macroeconomic Policy, Exchange Rate Policy, Energy Security

scholarly journals An Empirical Analysis Of The Determinants Of Exchange Rate In Nigeria

2018 ◽  
Vol 6 (5) ◽  
Author(s):  
Oke, Michale Ojo. ◽  
Adetan, Taiwo Temitayo
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Inflation Rate ◽  
Exchange Rate Policy ◽  
Domestic Product ◽  
Goods And Services ◽  
Negative Effect ◽  
Rate Policy ◽  
The Government

This study examined empirically the determinants of exchange rate in Nigeria using the ARDL Bounds test approach to co-integration for the period spanning 1986-2016. The result of the analysis shows that the gross domestic product (GDP), Interest rate (INT) and inflation rate (INF) have positive effect on exchange rate in Nigeria while degree of openness (DOP) recorded a negative effect on exchange rate (EXR) in Nigeria. The Error Correction Mechanism result appeared to be correctly signed and significant. The study therefore concluded that gross domestic product, interest rate and inflation rate are the major determinant of exchange rate in Nigeria under the study period. It is therefore recommended that government should focus more on production of goods and services that can be exported and also introduce policies that can discourage importation of goods into the country. The government must pursue a realistic and pragmatic exchange rate policy in  the  less  free  trade areas that would stem capital  flight and  ensure more investment in the Nigerian economy.

scholarly journals POST – CRISIS EXCHANGE RATE POLICY IN INDONESIA

2017 ◽  
Vol 2 (2) ◽  
Author(s):  
Abdul Hadi Ilman
Keyword(s):  
Exchange Rate ◽  
Capital Mobility ◽  
Exchange Rate Regime ◽  
Foreign Debt ◽  
International Market ◽  
Flexible Exchange Rate ◽  
Exchange Rate Policy ◽  
Asian Tigers ◽  
Rate Policy ◽  
The Exchange Rate

In 1997 Indonesia was hit by a severe financial crisis which led to the change of almost everything in the country, including the exchange rate regime; from managed floating to free floating or flexible exchange rate. It has been a major conclusion from academic debate that maintaining exchange rate at a certain level or band (soft peg) was no longer workable in the more integrated financial system, international market, and free flow of capital mobility across economy.Indonesia once was known as one of the “Asian Tigers” which were believed to be the next industrialized economies as was being indicated by astounding macroeconomic performance since the early 1990s. The exchange rate management, in which the objective was to have a competitiveness in the international market, was making a huge contribution to that performance. No one suspected those countries would be hit by the crisis until Thailand’s Bath was under attacked and suddenly it spread expeditiously to other economies.Domestically, economy of Indonesia was funded by foreign debt in the several years before crisis to leverage the economy, especially private sector. Thus, when the currency crisis was happening, the value of rupiah was depreciated so much and the central bank could not afford to stabilize the value of rupiah in the market. Then a huge amount of the dollar-denominated short term debt was suspected to default since the debt value in rupiah was becoming very large.

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