The Brazilian Exchange Rate Crisis of January 1999

2002 ◽  
Vol 34 (1) ◽  
pp. 143-164 ◽  
Author(s):  
AFONSO FERREIRA ◽  
GIUSEPPE TULLIO
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Monetary Reform ◽  
The Real ◽  
Market Rate ◽  
The Us ◽  
Us Dollar ◽  
The Exchange Rate

From the monetary reform of July 1994 until January 1999 Brazil followed the policy of pegging the new currency (the real) to the US dollar. The central rate was initially fixed at 1[ratio ]1 to the US dollar, but no fluctuation band was set and the market rate was allowed to fluctuate substantially. After a sharp appreciation of up to 15 per cent the real remained at a premium to the dollar for two years (until June 1996). In March 1995, following the Mexican crisis, the Banco Central do Brasil adopted a crawling band without preannounced depreciations. This change in policy was meant to increase somewhat the flexibility of the exchange rate regime while still maintaining an anchor for inflationary expectations. The market rate depreciated by 13.9 per cent in the course of 1995 (December 1995 on December 1994), 7.1 per cent in 1996, 7.3 per cent in 1997 and 8.3 per cent in 1998. By December 1998 it had reached 1.2054 to the US dollar, a depreciation of only 20 per cent with respect to the central rate fixed at the end of the hyperinflation but about 40 per cent with respect to the rate prevailing in July 1994.

scholarly journals The Impact of Trading Information Sets on Exchange Rate Change and Volatility: Evidence From Taiwan

SAGE Open ◽  
2021 ◽  
Vol 11 (4) ◽  
pp. 215824402110529
Author(s):  
Ying-Sing Liu
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange Market ◽  
Rate Change ◽  
Small Island ◽  
The Real ◽  
The Us ◽  
Information Sets ◽  
Us Dollar ◽  
The Exchange Rate ◽  
The Impact

This study explores the Taiwan Dollar (TWD) as the currency of a small island economy, uses the trading information sets from overseas and the market itself to examine the impacts on the adjustment of daily spot exchange rates. The daily USD/TWD is explained by the trading information sets, contain which the daily trading activities and the ratio of the real body on the daily candlestick chart of technical analysis on the Taipei Foreign Exchange Market, as well as the US-dollar index return to explain the USD/TWD spot rate change. The results showed that some of the USD/TWD changes were related to the US-dollar index return on overseas, and that the effect of the US-dollar index return was not limited to the adjustment rate from the previous closing rate to the opening rate on the day, which would affect the adjustment spot exchange rate in the intraday opening-to-closing period. There is a significant positive relationship between the real body ratio of the daily candlestick chart and the return of the exchange rate, supporting the real body ratio related to the change of the exchange rate. The study model can greatly improve the model interpretation ability of the change of exchange rate by about 50% after considering the trading activity factors. Finally, this study found that the volatility has a positive effect on Mondays and the 2008-financial crisis, and based on the shock that the news of depreciation was higher than the news of appreciation, so there exist asymmetry volatility.

scholarly journals THE INFLUENCE OF OIL PRICES ON INDONESIA’S EXCHANGE RATE

2019 ◽  
Vol 21 (3) ◽  
pp. 303-322 ◽  
Author(s):  
Seema Wati Narayan ◽  
Telisa Falianty ◽  
Lutzardo Tobing
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Exchange Rate Regime ◽  
Oil Prices ◽  
The Real ◽  
Float Exchange Rate ◽  
Long Run ◽  
The Us ◽  
Us Dollar

This study tests for a long-run relation between oil prices and the rupiah–US dollarexchange rate. We discover, first, that the long-run cointegration relation between oilprices and the real exchange rate (RER) is sensitive to different exchange rate regimesin Indonesia. Second, we find a long-run cointegrating relation between oil prices andthe RER over the float exchange rate regime. However, in the managed float period,there is no evidence of a long-run relation between oil prices and the RER. In the longrun, higher oil prices lead to an appreciation of the rupiah against the US dollar in thefloat period (post-August 1997 period). We demonstrate that these results are robust todifferent data frequencies.

scholarly journals Cointegration of Stock Market and Exchange Rate in Indonesia

2019 ◽  
Vol 2 (2) ◽  
pp. 125 ◽  
Author(s):  
Pribawa E Pantas ◽  
Muhamad Nafik Hadi Ryandono ◽  
Misbahul Munir ◽  
Rofiul Wahyudi
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Capital Market ◽  
Global Financial Crisis ◽  
The Us ◽  
Us Dollar ◽  
The Exchange Rate ◽  
Johansen Cointegration Test ◽  
The Global Financial Crisis

This study aims to determine the long-term relationship between stock market and exchange rate in Indonesia. The research method used is Johansen cointegration test. The results of this study found no cointegration between the variables tested. Thus the exchange rate, JII, and IHSG have no relationship in the long term. The fluctuation of the rupiah exchange rate in recent years did not generally affect the performance of stock indices especially after the global financial crisis of 2008. This shows the capital market in Indonesia has a good performance so that it is not so sensitive to the sentiment of the decline in the rupiah against the US dollar. This finding is in line with the findings of Syahrer (2010) which states the exchange rate has no effect on the stock market.

Optimistic and pessimistic economic sentiments and US Dollar exchange rate

2021 ◽  
Author(s):  
Sonia Kumari ◽  
Suresh Kumar Oad Rajput ◽  
Rana Yassir Hussain ◽  
Jahanzeb Marwat ◽  
Haroon Hussain
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Ordinary Least Squares ◽  
Exchange Market ◽  
Dollar Exchange Rate ◽  
The Us ◽  
Short Run ◽  
Us Dollar ◽  
The Exchange Rate

This study investigates the affiliation of various proxies of economic sentiments and the US Dollar exchange rate, mainly focusing on the real effective exchange rate of USD pairing with three other major currencies (USDEUR, USDGBP, and USDCAD). The study has employed Google Trends data of economy optimistic and pessimistic sentiments index and survey-based economy sentiments data on monthly basis from January 2004 to December 2018. The study engaged Ordinary Least Squares (OLS) and Auto-Regressive Distributed Lag (ARDL) estimation techniques to evaluate the short-run and long-run effects of economy-related sentiments and macroeconomic variables on the exchange rate. The results from the study found that Economy Optimistic Sentiments Index (EOSI) and Economy Pessimistic Sentiments Index (EPSI) appreciate and depreciate the US Dollar exchange rate in the short-run, respectively. Our sentiment measures are robust to survey-based Michigan Consumer Sentiment Index (MSCI), Consumer Confidence Index (CCI), and various macroeconomic factors. The MSCI and CCI sentiments show a long-term impact on the foreign exchange market. This study implies that economic sentiments play a vital role in the foreign exchange market and it is essential to consider behavioral aspects when modeling the exchange rate movements.

Greece and Hong Kong

2017 ◽  
Author(s):  
Yue Chim Richard Wong
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Economic Shocks ◽  
Fixed Rate ◽  
Policy Tool ◽  
Monetary Independence ◽  
Monetary Unit ◽  
The Us ◽  
Us Dollar

Both Greece and Hong Kong have unified exchange rate regimes. Greece, as a member of the Eurozone, uses the euro as its local monetary unit. Hong Kong, under the linked exchange rate regime, uses a local monetary unit with its currency fully backed by the US dollar at a fixed rate. As a consequence, both economies have surrendered monetary independence to an external monetary authority. Both have committed to not using currency devaluation or revaluation as a policy tool for stabilizing their economies when they are struck by financial and economic shocks. The only way they could regain monetary independence would be, in Greece’s case, exiting the Eurozone and reissuing the drachma, and in Hong Kong’s case, breaking the linked exchange rate and putting in place an alternative monetary arrangement for issuing the Hong Kong dollar. An economy that has joined a unified exchange rate regime will face situations from time to time when the requirements of global economic integration will be in conflict with the requirements of a political democracy.

scholarly journals Effect of Exchange Rate Returns on Equity Prices: Evidence from South Africa and Nigeria

2017 ◽  
Vol 9 (11) ◽  
pp. 35
Author(s):  
Jibrin Daggash ◽  
Terfa W. Abraham
Keyword(s):  
South Africa ◽  
Exchange Rate ◽  
Stock Market ◽  
Stock Exchange ◽  
Equity Prices ◽  
The Us ◽  
Short Run ◽  
Us Dollar ◽  
The Exchange Rate ◽  
The Uk

This paper examines the exchange rate returns of the Rand (relative to the US dollar) and the Naira (relative to the US dollar) for the presence of volatility. It also examines the effect of the exchange rate returns on the performance of their respective stock market. While it was found that the returns of the South African Rand was volatile, the Nigerian naira was not. Estimating the effect of exchange rate returns and crude oil price on the stock market indices of both countries showed that exchange rate return have a positive effect on the performance of the Nigerian stock exchange thus, confirming the stock flow hypothesis for Nigeria and refuting same for South Africa. Although the VAR granger causality identifies short run fluctuation of the naira as a significant factor affecting the performance of the Nigerian stock exchange in the short run, the Johannesburg stock exchange was found to be mostly affected by short run changes in the Rand and the UK FTSE 100. The paper concludes that policies aimed at stabilizing exchange rate and encouraing more non-oil stocks to be quoted in the Nigerian stock exchange will important. For the Johanesburg stock exchange, raising the listing requirement for firms quoted in the UK FTSE 100 and also seeking listing or already listed in the JSE will be a plausible idea. For both countries, however, curtailing swings in their exchange rate returns would help attract new investments and sustain existing ones hence, helping to spur growth.

scholarly journals EFFECT OF INTEREST RATE, INFLATION AND NATIONAL INCOME TO RUPIAH THE AMERICAN DOLLARS IN 2006-2016

2017 ◽  
Vol 15 (2) ◽  
pp. 240-248
Author(s):  
Muhammad Irsyad Mustaqim ◽  
Saparuddin Mukhtar ◽  
Tuty Sariwulan
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Multiple Regression ◽  
Time Series Data ◽  
National Income ◽  
Coefficient Of Determination ◽  
Series Data ◽  
The Us ◽  
Us Dollar ◽  
The Exchange Rate

This research aims to analyze the effect of interest rates, inflation and national income against the rupiah exchange rate over the US dollar. As for the data used in this research is secondary data, with this type of time series data in the period 2006-2016 obtained from Bank Indonesia and the World Bank. The method of this research method using exposé facto. Data analysis techniques used in this research is the analysis of multiple regression. By using multiple regression analysis model, the output shows that interest rates (X 1) positive and significant effect of the exchange rate of the rupiah against the US dollar up (Y). Inflation rate (X 2) do not affect the exchange rate of the rupiah significantly to top u.s. dollars (Y). National income (X 3) a positive effect of the exchange rate of the rupiah against the US dollar up (Y). Of test results by looking at their significance value F = 0.000 then it can be said to be 0.05 < simultaneously interest rates, inflation and national income effect significant at α = 5% against the rupiah exchange rate over the US dollar in the year 2006-2016. The value of the coefficient of determination (R2) acquired for 0.660 has a sense that the rupiah exchange rate over the US dollar can be explained by the level of interest rates, inflation and national income amounted to 66% while the rest is explained by other factors that do not exist in the model for this research.

Global Realignment of Exchange Rates: East Asia's Dilemma

2005 ◽  
Vol 193 ◽  
pp. 33-36 ◽  
Author(s):  
Ali Al-Eyd ◽  
Ray Barrell ◽  
Amanda Choy
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Exchange Rate Regime ◽  
Chinese Economy ◽  
Trade Surplus ◽  
International Debate ◽  
The Past ◽  
The Us ◽  
Us Dollar ◽  
Economic Imbalances

Over the past year East Asia has featured prominently in the international debate over the widening global economic imbalances. In particular, China has attracted much attention for the nature of its currency regime and its large trade surplus. Until recently, China pursued a strict policy of tightly fixing the value of the renminbi against the US dollar and, as a result, Chinese exports have remained highly competitive while the US current account position has deteriorated markedly. A substantial widening of China's trade surplus in the first half of this year has sparked a great deal of criticism from the US regarding China's exchange rate regime. Protectionist threats from the US and growing domestic imbalances in the Chinese economy have succeeded in prompting the Chinese authorities to reform their exchange rate regime. On 21 July, Chinese authorities announced the abandonment of the longstanding US dollar peg in favour of a managed system where the renminbi is fixed against a basket of currencies. The specifics of this new exchange rate regime provide ample scope for further renminbi appreciation; however, this will be an orderly and drawn-out process dictated by both economic and market conditions.

scholarly journals Influence Of Australian Coal Export On A$/US$ Exchange Rate: A Longitudinal Study

2012 ◽  
Vol 11 (4) ◽  
pp. 397 ◽  
Author(s):  
Md. Liakat Ali ◽  
Sheikh F. Rahman
Keyword(s):  
Exchange Rate ◽  
Longitudinal Study ◽  
Positive Relationship ◽  
Dollar Exchange Rate ◽  
Quarterly Data ◽  
Australian Dollar ◽  
The Us ◽  
Australian Coal ◽  
Us Dollar ◽  
The Exchange Rate

This paper investigates the contribution of Australian coal export to determine the exchange rate of Australian dollar with the US dollar. The quarterly data of Australian coal export and the Australian dollar exchange rate from 1992-2009 are employed to measure the influence of Australian coal export on A$/US$ exchange rate. This study finds that the Australian coal export has a positive relationship with the exchange rate of A$/US$ and their relationship is becoming stronger. The findings of this research suggest that the volume of Australian coal export contributes about 8% to determine the exchange rate of A$/US$ between the period of 1992-2009. The results of this analysis confirm that for each one million tonnes export increase of Australian coal, the Australian dollar value against the US$ increases by 0.002450 USD.

Sign in / Sign up

Export Citation Format

Share Document