The effects of eliminating Riba in foreign currency transactions by introducing global FinTech network

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Selim
Keyword(s):  
International Trade ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Banking System ◽  
Global Network ◽  
Content Type ◽  
Positive Effects ◽  
Cross Border ◽  
Financial Transactions ◽  
Number Of Customers

Purpose This paper aims to investigate the effects of eliminating Riba in foreign currency transactions. Riba or interest arises when foreign currencies are bought and sold at different rates. From the Islamic perspective, the difference between the buying and selling rates of foreign exchange will constitute Riba. Also, this paper examines the effects of eliminating such Riba on major macroeconomic variables. Design/methodology/approach This study is based on the hadith which imply that if buying and selling rates of currencies or foreign exchanges are same, i.e. if one sells BD1 = Dh10 and Dh10 = BD1 on spot, there will be no Riba. This can be guaranteed if the Islamic banking system introduces the technology, often known as FinTech interest-free foreign exchange bank machines (IFfexBM), which will automatically dispense BD10 for Dh100 and vice-versa, both locally and globally, and it will have tremendous positive effects in the economy. Furthermore, the effects of introducing FinTech for eliminating Riba will be analyzed on economic and international trade activities by using aggregate expenditure (AE) and aggregate output model within the tenets of Islamic principles. Findings If Islamic banks (IBs) can introduce FinTech global network system where any client can buy or sell foreign currency at the same rate without any markup, it will increase the market share for IBs by increasing the number of customers and number of branches, and it will increase the inflow of funds and volumes of transactions, especially in international trade, global financial transactions and cross-border shopping. Such an increase in transactions will increase AE and AE will continuously shift up. Such an upward shift will have positive effects on equilibrium output, employment and prosperity. Originality/value This is, perhaps, one of the latest attempts to eliminate Riba from foreign exchange transactions by introducing FinTech IFfexBM in each and every locality. Such elimination of Riba will not only reduce the cost of cross-border transactions but it will also reduce cost in international trade and financial transactions among nations, and therefore, it will have expansionary effects on equilibrium output, employment and global prosperity.

scholarly journals COMPETITION OF TRANSNATIONAL BANKS: MAIN TRENDS AND WAYS OF DEVELOPMENT

2021 ◽  
pp. 151-157
Author(s):  
Надежда Константиновна Савельева ◽  
Татьяна Алексеевна Тимкина
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Competitive Advantages ◽  
International Banking ◽  
Statistical Research ◽  
Cross Border ◽  
The World ◽  
Financial Transactions ◽  
Level Analysis

Статья посвящена проблемам сохранения конкурентных преимуществ коммерческих банков для осуществления финансовых операций на трансграничных рынках. Целью исследования является анализ основных тенденций развития деятельности транснациональных банков в условиях глобализации. Объектом исследования являются мировые лидеры международной банковской сферы. Научная новизна заключается в разработке основных направлений развития банковской системы на международном уровне, результатах анализа опыта лидирующих транснациональных банковских компаний в условиях пандемии The article is devoted to the problems of maintaining the competitive advantages of commercial banks for the implementation of financial transactions in cross-border markets. The aim of the study is to analyze the main trends in the development of the work of transnational banks in the context of globalization. The object of research is the world leaders of the international banking sector. In the process of research, the authors have analyzed theoretical and practical material used in general methods of scientific knowledge and statistical research. Scientific novelty lies in the development of the main directions for the development of the banking system at the international level, analysis of the experience of leading transnational banking companies in the context of a pandemic.

The impact of exchange volatility exposure on firms’ foreign-denominated debts

2019 ◽  
Vol 57 (11) ◽  
pp. 3035-3060 ◽  
Author(s):  
Yujuana Min ◽  
Oh Suk Yang
Keyword(s):  
Risk Management ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Management Strategies ◽  
Foreign Exchange Risk ◽  
Content Type ◽  
Exchange Risk ◽  
Foreign Exchange Exposure ◽  
Foreign Exchange Volatility ◽  
Exchange Risk Management

Purpose This research began by acknowledging that conventional analysis on the foreign exchange exposure could not adequately reflect firms’ risk management strategies, which firms take actions against uncertainties raised by foreign exchange. In order to conceptualize uncertainty aroused by foreign exchange, the purpose of this paper is to develop an index that could measure corporate profits’ sensitivity to foreign exchange uncertainty and examine its possibility of utilization. Design/methodology/approach As an alternative to foreign exchange exposure, the present research derived the foreign exchange volatility exposure and analyzed the determinants of foreign currency-denominated debt in terms of foreign exchange volatility exposure. The foreign exchange volatility exposure draws from partially differentiating a firm’s operating profits to the exchange rate volatility. Findings The major findings are as follows. First, before the Asian financial crisis, South Korean enterprises had similar responses to the exchange volatility exposure as compared with the exchange exposure on procuring foreign-denominated debt. Second, since the global financial crisis (GFC), not only have Korean firms’ response mechanisms to both exposures changed, but also the significance of exchange volatility exposure has been further emphasized. Furthermore, Korean companies have dealt with exchange uncertainties by decreasing foreign-denominated debt as their foreign exchange volatility exposure increased after GFC. In contrast, the influence of conventional exchange exposure on foreign-denominated debt has diminished. Research limitations/implications Future research should focus on several points. First, additional research could extend to foreign investors who have divergent perception and consideration in regard to foreign exchange risk management. Second, research on decision making and motivation in foreign currency choice should be conducted in order to deepen academic understanding. Third, research that refines the variables added in the current research should be conducted. Finally, as a way to manage foreign exchange volatility exposure, further investigation based on this study is possible. Practical implications The results of this study have several important theoretical and empirical implications for companies’ foreign exchange risk management strategy. First, through foreign exchange volatility exposure, which can usefully take over the role of the existing foreign exchange exposure, the authors can confirm market uncertainty as being relevant to the foreign exchange risk management strategy. Second, through the financial influence that the foreign exchange volatility exposure has on the foreign currency-denominated debt, the authors can observe the Korean firms’ paradigm shifts in their foreign exchange risk management strategies. Originality/value This research confirms the importance of foreign exchange volatility exposure in the research works dealing with firms’ exchange risk management, also the possible influence of foreign exchange volatility exposure in the future might be increased as uncertainty is raised from foreign exchange escalating.

Russian banks will need tight control and pruning

2016 ◽  
Keyword(s):  
Banking Sector ◽  
Foreign Currency ◽  
Banking System ◽  
Tight Control ◽  
Content Type ◽  
Perceptions Of Risk ◽  
Banking Sector Development ◽  
Foreign Loans ◽  
The Cost ◽  
Systemically Important Banks

Subject Measures to keep Russia's banking system sustainable. Significance In 2015, the majority of Russian banks recorded operating losses, with the exception of Sberbank. Banks had to repay foreign currency-denominated loans whose cost rose as the ruble fell in value. Access to further foreign loans was severely constrained by Western sanctions, the cost of domestic borrowing was high and consumers' real incomes declined. The Central Bank of Russia (CBR) continues to support the sector by offering refinancing facilities and capital support for systemically important banks while shutting down banks engaged in high-risk activity. Impacts Western sanctions continuing into 2017 will worsen investor perceptions of risk. CBR intervention will avoid a collapse in depositor confidence. Geopolitical isolation will limit banking sector development.

Global trade and shipping will long remain subdued

2016 ◽  
Keyword(s):  
Economic Development ◽  
International Trade ◽  
Emerging Economies ◽  
Global Trade ◽  
Trade Patterns ◽  
Content Type ◽  
Cross Border ◽  
Border Trade ◽  
Merchandise Trade ◽  
Developed World

Subject Trends in global trade and shipping. Significance Slower growth in China and other emerging economies, and feeble growth in the developed world are curbing the expansion of world merchandise trade. Reflecting those trends and the rising importance of cross-border trade in services, international shipping will experience prolonged low growth. Impacts The level and nature of future Chinese economic development will remain the largest determinant of international trade and shipping trends. The pace at which the digital economy disrupts global manufacturing supply chains will have far-reaching consequences for trade patterns. Global trade will shift away from the shipping-intensive intra-industry patterns of the last few decades.

Deadly migrant trafficking trade by sea and restrictive service trade by the WTO

2015 ◽  
Vol 14 (2) ◽  
pp. 86-104
Author(s):  
Rafiqul Islam ◽  
Khorsed Zaman
Keyword(s):  
International Trade ◽  
Social Inclusion ◽  
Developed Countries ◽  
Global Poverty ◽  
Content Type ◽  
Cross Border ◽  
Trade Law ◽  
International Trade Law ◽  
Law And Policy ◽  
Restrictive Trade

Purpose – The purpose of this paper is to examine one of the most pressing global challenges, the ongoing migrant trafficking across sea, from international trade law and policy perspective. It identifies global poverty as one of the underlying causes of such trafficking. It argues that restrictive trade in labour-intensive services of the World Trade Organization (WTO) contributes to and sustains poverty in many migrant producing countries. Chronic unemployment in poor countries with surplus manual workforce renders these workers bewildered to survive in a jobless and incomeless home markets. Non-liberalization of movements of natural persons under General Agreement on Trade in Services (GATS) Mode 4 prevents legal cross-border delivery of labours. Restrictive trade in agriculture has but aggravated their marginalized plight. It is this poverty trap that pushes workers, lured by smugglers, to take risky migration routes for better life in countries with labour shortages. Design/methodology/approach – The paper adopts a blend approach of theoretical and applied aspects of international trade law and policy, which is interpreted and applied to a fact situation of contemporary challenge of migrant trafficking by sea. Findings – This paper establishes a nexus between restrictive Mode 4 trade and its implications for poverty-induced migration trafficking trade. It suggests a palatable trade law and policy-based reform response for the WTO to ameliorate poverty and migration trafficking trade concurrently through the creation of legal channels for the cross-border delivery of labours by liberalizing Mode 4 trade in a manner beneficial for developed countries as well. Originality/value – Its value lies in its contribution to maximize multi-lateral trade liberalization for the benefit of all countries, social inclusion and economic emancipation of the disadvantaged, which would minimize global poverty.

scholarly journals Kontrak Tukaran Matawang Asing Melalui Internet: Satu Tinjauan Hukum

2015 ◽  
Author(s):  
Alias Azhar ◽  
Mohd Zaki Zainol ◽  
Mohd. Nizho Abdul Rahman
Keyword(s):  
International Trade ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Islamic Law ◽  
The Internet ◽  
Modus Operandi ◽  
Legal Assessment ◽  
Currency Exchange ◽  
Internet Discussion

Foreign currency exchange contracts or foreign exchange (forex) began to arise when there is an international trade transaction involves two countries using different currencies. The legal assessment of the said issue should apply methods of interpretation and understanding of the terms to be applied in the contract. Terms such as leverage, hedging (hedging) and swap are thoroughly evaluated based on a practical modus operandi allowing for the precise legal assessment. This article discusses the contractual issues and modus operandi of foreign currency transactions and its application from the practical aspects using the Internet. Discussion on the legal assessment is based on the Islamic law of transactions on applied type of contract ('akad), the use of hedging and leverage in foreign exchange contracts via the Internet. Keywords: Contract, Foreign Exchange, Islamic Transaction, Leverage, Muamalat  

scholarly journals ACQUAINTANCE TO FOREX FOREIGN EXCHANGE MARKET

2020 ◽  
pp. 174-180
Author(s):  
O. Zaitsev ◽  
T. Dvorianova
Keyword(s):  
Foreign Exchange ◽  
Professional Training ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Point Of View ◽  
Easy Access ◽  
Exchange Market ◽  
Potential Threat ◽  
Currency Market ◽  
Financial Transactions

The article draws attention to the steady growth of the general trend of direct participation of individuals in financial transactions using electronic platforms. In particular, the article notes the increased interest in participating in operations in the Forex currency market. It is emphasized that relatively technically easy access to participation in financial transactions through the use of electronic platforms is currently a potential threat to financial security for the funds of participants in such transactions. This is a lack of professional training of most novice traders who voluntarily become participants in financial transactions. It is emphasized that stock exchange transactions on stock markets, purchase and sale of currency on electronic platforms, transactions with gold, etc. require, along with general, also special knowledge on certain specific areas of economic development and financial relations. Also, psychological and behavioral factors begin to "work" in such relationships. It is noted that only from the beginning of 2019 in Ukraine at the legislative level began a systematic regulation of the structure of the foreign exchange market and the procedure for trading in foreign currency. The article states that it is time to pay attention to digitalized trading activities from a professional point of view and start teaching in educational institutions the relevant disciplines for training and acquiring students' general skills in trade and financial transactions on electronic platforms. From this point of view, the article provides an introductory review of the Forex currency market, outlines the principles of its operation, pays more attention to trading strategies. As a result, the following conclusions are made that, first, the foreign exchange market is highly profitable provided that its trends are mastered; secondly, the foreign exchange market is high risk; it is necessary to understand not only in many terms, but, especially, in processes and situations in the financial-globalized world to confidently use charts of change of cost of currencies for profit; thirdly, there are many different strategies that can be used successfully in the currency market, from the simplest - for amateurs, to more complex - for experienced traders, but none of them will fit perfectly for a particular psychotype, professional level and amount of time a person - trader can pay trade. Of particular value, according to the authors, is the following conclusion: a trader creates his own strategy, which provides a greater likelihood of earnings in the international Forex market. Currency trader is a creative activity, but an activity based on mastering a large base of professional knowledge.

scholarly journals Foreign Exchange Market and the Asset Approach

2021 ◽  
Vol 9 (9) ◽  
pp. 351-356
Author(s):  
Dr. Varsha Agarwal
Keyword(s):  
International Trade ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Trade Flows ◽  
Exchange Market ◽  
Abstract Exchange ◽  
Relative Prices ◽  
Goods And Services

Abstract: Exchange rates play a central role in international trade because they allow us to compare the prices of goods and services produced in different countries. A consumer deciding which of two American cars to buy must compare their dollar prices. Households and firms use exchange rates to translate foreign prices into domestic cur-rency terms. Once the money prices of domestic goods and imports have been expressed in terms of the same currency, households and firms can compute the relative prices that affect international trade flows. Keywords: Foreign Exchange, Exchange Rate, International Trade, Foreign Currency, FOREX Rate, Assets Approach.

scholarly journals Between flowers and fears: the new coronavirus pandemic (COVID-19) and the flower retail trade

2021 ◽  
Vol 27 (1) ◽  
pp. 26-32
Author(s):  
Adilson Anacleto ◽  
Anna Paula de Araújo Bornancin ◽  
Silas Hallel Camilo Mendes ◽  
Luciane Scheuer
Keyword(s):  
Online Courses ◽  
Retail Trade ◽  
Just In Time ◽  
Exploratory Research ◽  
Inventory Costs ◽  
Positive Effects ◽  
Current Scenario ◽  
Financial Transactions ◽  
Number Of Customers ◽  
Complementary Actions

Abstract In order to support a better understanding of the current scenario of the crisis installed by the New Coronavirus (SARS-CoV-2: COVID-19) in the flower retail trade, it is presented a descriptive exploratory research carried out between April and May 2020 with 30 flower shop managers located in the Southern region of Brazil. The results showed that the most significant impacts were the drop in the number of customers, which reduced the company’s income when compared to the values sold before the pandemic, and that the pandemic scenario generated a 45.3% reduction in financial transactions on average. Among the flower shops in this survey, 70% of flower shops were closed for an average of 21.4 days, when they were reopened with restrictions on attendance related to hours or the number of people inside the stores. The e-commerce and social media were the main tools to confront this situation, and the most used Apps were WhatsApp and Instagram. But other actions such as discounting on purchases by quantity, free delivery and marketing in the surrounding were also registered. Among the possible complementary actions in order to face this crisis and which can have positive effects, it is highlighted the online courses directed to the trade of gardening kits, the adoption of the Just In Time (JIT) methodology that can result in partnerships with local producers in order to reduce inventory costs and purchase prices, and the organization of collective purchasing groups to bargain prices with wholesalers, as well as the reduction of transportation and operational costs at Veiling in Holambra.

Iran’s foreign-exchange pressures will boost inflation

2018 ◽  
Keyword(s):  
Central Bank ◽  
Foreign Exchange ◽  
Regime Change ◽  
Foreign Currency ◽  
Economic Pressure ◽  
Political Uncertainty ◽  
Economic Stability ◽  
Donald Trump ◽  
Content Type ◽  
The Us

Significance From a rate of 39,000 to the dollar in December 2017, the rial devalued to around 65,000 in April 2018. There was a sharp spike to 75,000 after US President Donald Trump announced the US withdrawal from the Iran nuclear deal on May 9. On May 13 the central bank (CBI) announced strict new foreign currency limits for travellers. Impacts Socio-economic pressure and political uncertainty may cause new demonstrations and even riots. Protestors will focus on economic stability rather than regime change, with demands for jobs, food and housing. Washington will seek to increase the economic pressure on Iran, through sanctions and other means.

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