Zimbabwe economic crisis may escalate further

2019 ◽  
Keyword(s):  
At Risk ◽  
Public Relations ◽  
Economic Crisis ◽  
Foreign Currency ◽  
Fiscal Deficit ◽  
Content Type ◽  
International Public Relations ◽  
The Us ◽  
Funding Programme ◽  
Us Dollar

Significance Since the abandonment of the multi-currency regime in June, the new Zimbabwe dollar has lost almost 60% of its value relative to the US dollar. The parallel market for foreign currency has re-emerged, forcing the authorities to adopt increasingly draconian measures to enforce the use of the new currency. Meanwhile, more than half of Zimbabweans are at risk of being food insecure. Impacts Despite hiring several international public relations firms, Harare will continue to suffer reputationally amid a renewed crackdown. As the authorities attempt to support the Zimbabwe dollar and re-balance the fiscal deficit, further austerity measures are likely. While Harare hopes austerity measures will help regain IMF confidence, a new funding programme in early 2020 is now unlikely.

Zimbabwe economic pressures will linger

2019 ◽  
Keyword(s):  
Tropical Cyclone ◽  
Foreign Currency ◽  
Tax Revenue ◽  
Interbank Market ◽  
Content Type ◽  
Local Currency ◽  
The Us ◽  
Us Dollar ◽  
Price Distortions ◽  
Energy Regulatory

Significance Since its introduction in February, the local real-time gross settlement (RTGS) dollar, a de facto new local currency, has lost over 60% of its value relative to the US dollar on both the formal interbank market and the parallel market. Meanwhile, drought and the damage wrought by Tropical Cyclone Idai have placed further pressure on scarce foreign currency resources, prompting increased public protests. Impacts Forex and fuel turmoil will harm the pivotal mining sector, particularly gold, prompting rising job losses and scaling back of operations. Increased tax collection obscures the emergence of an increasingly self-defeating tax revenue system. The Zimbabwe Energy Regulatory Authority's continued control of pricing could see price distortions persisting and renewed fuel shortages.

The international strength of the euro will grow

2021 ◽  
Keyword(s):  
Euro Area ◽  
Financial Services ◽  
Raw Materials ◽  
Domestic Demand ◽  
Content Type ◽  
The Us ◽  
Us Dollar ◽  
Strategic Autonomy ◽  
Geopolitical Risks ◽  
The Eu

Significance The proposals identified areas where the euro could potentially become more dominant, such as the issuance of green bonds, digital currencies, and international trade in raw materials and energy. Ambitions to enhance the international leverage of the euro are being driven by the aim to strengthen EU strategic autonomy amid rising geopolitical risks. Impacts Developing its digital finance sector would be an opportunity for the EU to enhance its strategic autonomy in financial services. Challenging the US dollar would require the euro-area to rebalance its economy away from foreign to domestic demand. Member state division will prevent the economic reconfiguration the euro-area needed to make the euro a truly global currency.

Are stable cryptocurrencies exempted from impossible trinity?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dimitrios Koutsoupakis
Keyword(s):  
Exchange Rate ◽  
Peer Review ◽  
Price Variation ◽  
Content Type ◽  
The Us ◽  
Us Dollar ◽  
Asset Classes ◽  
Complete Catalogue ◽  
Empirical Framework

PurposeWhile monetary autonomy is self-explanatory for cryptocurrencies such as Bitcoin with predetermined supply path, it is of great interest to probe into the monetary structures of Stablecoins. In these supply contracts and expands and capital restrictions apply due to the existence of reserves as the exchange rate arrangement adheres to a price rule.Design/methodology/approachEver since the launch of Bitcoin and its offspring, examination of cryptocurrencies' trading activity from the empirical finance viewpoint has received much attention and continues to do so. The particular monetary arrangements found in Stable cryptocurrencies (colloquially referred to as Stablecoins), however, have not been properly (1) classified and (2) studied within an empirical international finance and banking context. This paper provides an empirical framework analogous to Impossible Trinity for exploring monetary arrangements across Stablecoins wherein reserves are held as price stability is targeted.FindingsThe study findings of existence of the degree of achievement along the three dimensions of the Impossible Trinity hypothesis, namely monetary independence, exchange rate stability and financial openness for a representative sample able to cover all varieties of Stablecoins, provide fresh empirical insights and arguments to this growing literature with respect to the success of their embedded exchange rate stabilization mechanisms. While the hypothesis can be supported for all cryptocurrencies in question, the trade-off combination among exchange rate stability, capital openness and monetary independence varies with the categorical types of Stablecoins.Research limitations/implicationsIf Stable cryptocurrencies, therefore, claim the role of global monetary assets freed from sovereign limits and national boundaries, it is critical to explore whether they adhere to traditional monetary frameworks. It goes without saying that in this work the author does not use a complete catalogue of all the available Stablecoins, rather a complete catalogue of all the possible asset classes of Stablecoins. While there is a significant difficulty in finding Algorithmic Stablecoins and, so far, there is plethora of Stable Token initiatives, a broader sample to further examine these under this paper's empirical framework is suggested. Enrichment of the robustness analysis by constructing additional proxies, possibly building time series for the proposed cmo1 subindex and using additional estimation methods is encouraged.Practical implicationsStablecoins have been developed aiming to address the issue of excessive price variation in cryptocurrencies such as Bitcoin. Holders of Stablecoins enjoy the combined advantages of using a blockchain-based digital infrastructure in fulfilling the functions of store of value and media of exchange and of using a traditional currency, which merely plays the role of the unit of account (and in some circumstances the trusted reserve to which is convertible to). Understanding the varieties of Stablecoins and quantifying the components for success of their price stabilization may result in designing better Stablecoins.Social implicationsBlockchain and cryptocurrencies have introduced new challenges to money and banking. Cryptocurrencies, which independently float such as Bitcoin, have gained the interest so far due to price variation that allows for gains. But these should be by far not considered to be a substitute to traditional means of payment. Lately, Stablecoins have increasingly gained attention for that USD Tether/Bitcoin pair (a Stablecoin pegged to the US dollar at parity) has outrun the US dollar/Bitcoin pair as the most traded pair in digital exchanges marking the strong position and high demand for Stablecoins.Originality/valueThis approach uncovers the varieties of Stablecoins with respect to their monetary constraints compared to the rest of the cryptocurrencies, which independently float. In this paper, the author provides a conceptual framework for the analysis of the exchange rate mechanisms conditional on Stablecoin asset classes accompanied with an empirical study from the monetary viewpoint. This is the first work in this attempt. The empirical framework employed is analogous to the traditional theory of international monetary economics referred to as Impossible Trinityz.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/JES-06-2020-0279

scholarly journals The US dollar and new imperialism under the logic of capital accumulation

2019 ◽  
Vol 2 (1) ◽  
pp. 98-107
Author(s):  
Haiping Qiu ◽  
Min Zhao
Keyword(s):  
Capital Accumulation ◽  
International Monetary System ◽  
Content Type ◽  
Monetary System ◽  
The Us ◽  
The World ◽  
The Status ◽  
The Usa ◽  
New Imperialism ◽  
Us Dollar

Purpose The world currency is endowed with two inherent contradictions, namely, the general contradiction of all currencies and the special contradiction between the quality and quantity of the world currency. The paper aims to discuss these issues. Design/methodology/approach In the wake of the Second World War, the USA, with its strong economic and military strength, established an international monetary system centered on the US dollar (USD). This gave USD the status of “world currency” and bounded it to the US imperialist hegemony with mutual integration and interaction, making it possible for USD capital to conduct international exploitation and wealth plundering extensively around the world. Findings The contradiction between the capital logic and the power logic, which is inherent in capital accumulation models of the new imperialism, also indicates the inevitable decline of USD. Originality/value This constitutes an important feature of the new imperialism. However, as a sovereign currency, USD has inextricable and inherent contradictions while exercising its function as the world currency.

Hong Kong and Denmark will keep currency pegs

2015 ◽  
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Medium Term ◽  
Content Type ◽  
The Us ◽  
Exchange Rate Arrangements ◽  
Exchange Markets ◽  
Us Dollar ◽  
Currency Pegs

Subject The longevity and outlook for currency pegs. Significance The abandonment of the Swiss franc's three-year-old peg to the euro on January 15 put into question the longevity of pegged exchange rate arrangements. It also highlights how unusual such arrangements are today. Impacts The SNB will still have to continue to intervene in foreign-exchange markets to stabilise the Swiss franc. The SNB move will not cause Danish authorities to stop pegging the Danish krone to the euro. The near- and medium-term longevity of the Hong Kong dollar peg to the US dollar will not be questioned.

New Zimbabwean currency will struggle for traction

2019 ◽  
Keyword(s):  
Public Relations ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
Short Term ◽  
Content Type ◽  
International Reputation ◽  
Funding Programme ◽  
The Government ◽  
Recent Extension

Significance After a month of fuel protests and a violent military crackdown, Mangudya on February 20 effectively acknowledged Zimbabwean bond notes and electronic RTGS bank balances as part of a new currency scheme. The authorities' latest attempt to stabilise the parallel foreign exchange market, the RTGS dollar, will trade on a new interbank foreign exchange market on a ‘willing-buyer, willing seller’ basis. Impacts The recent extension of US sanctions will likely delay the prospect of a new IMF funding programme over the short term. The government will struggle to improve its international reputation despite a heightened public relations drive. Recent public protests are likely to have delayed the introduction of a brand-new national currency for now.

Bosnia's paralysed institutions add to sense of chaos

2020 ◽  
Keyword(s):  
Economic Crisis ◽  
State Level ◽  
The State ◽  
Local Elections ◽  
State Budget ◽  
Content Type ◽  
The Us ◽  
The Eu ◽  
Level Government ◽  
Political Disputes

Significance Intensified political disputes between the main parties are holding up the state budget for 2020, including funding for local elections in November. They also threaten to weaken the response to the looming socio-economic crisis from the COVID-19 pandemic. Impacts The US entry ban on former senior SDA member Amir Zukic is seen as an attempt to persuade the party to behave more responsibly. The EU is in a contest with China, Russia and Turkey to retain influence in the region. Pre-election positioning may explain the defection of Fahrudin Radoncic’s Union for a Better Future party from the state-level government.

Lobbying: a critical dimension of business strategy

2015 ◽  
Vol 57 (1) ◽  
pp. 17-27 ◽  
Author(s):  
Clifford D. Scott
Keyword(s):  
Public Relations ◽  
Business Strategy ◽  
Critical Dimension ◽  
Criminal Code ◽  
Full Spectrum ◽  
Content Type ◽  
Empirical Estimates ◽  
The Us ◽  
Us Government ◽  
The Usa

Purpose – This paper aims to prepare executives to pilot a US lobbying effort within the bounds of the US Federal law. Lobbying law may be thought of as the “regulation of regulation”, as it defines the ground rules for those wishing to have a direct impact upon all other regulatory systems. The article outlines what the US lobbying law requires, what it forbids and, perhaps most important, what the law does NOT regulate. Design/methodology/approach – The paper takes the full spectrum of US laws and regulations relevant to lobbying – including the Internal Revenue Service Code (tax code), the Federal Election Campaign Act, the Ethics in Government Act, the internal rules of both the House and Senate, the US Criminal Code and the Honest Leadership and Open Government Act – and organizes them into a single 2 × 2 matrix, explaining what all parties must do as well as what they must not do. Via this approach, the rules that govern the “marketplace” for lobbying in the USA are explained. The competition to shape US government policy transpires within this marketplace. Findings – Few activities the executive may engage in carry the potential payback of a well-executed lobbying campaign: empirical estimates range to returns on investment in the thousands of per cent. But the uninitiated may easily step over the line and invite both legal and public relations (PR) nightmares. Practical implications – Effective lobbying can afford a corporation or industry a lasting competitive advantage. Every well-rounded business strategy should include such a component, and every well-rounded executive should be capable of performing in this arena. A solid grounding in the legal matrix forming the boundaries of this activity is a prerequisite for effective performance. Originality/value – The paper organizes and outlines lobbying law in a fashion digestible by executives without legal training. It is of value to anyone wishing to engage in lobbying activities targeted at the US Government.

scholarly journals The impact of COVID-19 on the standard & poor 500 index sectors: a multivariate generalized autoregressive conditional heteroscedasticity model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maha Elhini ◽  
Rasha Hammam
Keyword(s):  
Significant Relation ◽  
Content Type ◽  
Daily Return ◽  
Technology Sector ◽  
Time Period ◽  
The Us ◽  
Us Dollar ◽  
The Impact ◽  
Autoregressive Conditional Heteroscedasticity ◽  
Daily Returns

Purpose This paper aims to examine the impact of the daily growth rate of COVID-19 cases in the USA (COVIDg), the Federal Fund Rate (FFR) and the trade-weighted US dollar index (USDX) on S&P500 index daily returns and its 11 constituent sectors’ indices for the time period between January 22, 2020, until June 30, 2020. Design/methodology/approach The study uses the multivariate generalized autoregressive conditional heteroscedasticity (MGARCH) model to gauge the impacts over the whole period of study, as well as over two sub-periods; first, January 22, 2020, until March 30, 2020, reflecting uncertainty in the US markets and second, from April 1, 2020, until June 30, 2020, reflecting the lockdown. Findings Results of the MGARCH model reveal a negative and significant relation between COVIDg and S&P500 index daily returns over the first sub-period and the whole study period in the following sectors, namely, communications, consumer discretionary, consumer staples, health, technology and materials. Yet, COVIDg showed a positive and significant relation with S&P500 index daily returns during the second time period in the following sectors, namely, communication, consumer discretionary, financial, industrial, information technology (IT) and utilities. Besides, USDX showed a negative significant effect on S&P500 index daily returns and on the daily return on each of its 11 constituent sectors over the second sub-period and the whole period. Further, FFR showed a significant effect only in the second sub-period, specifically, a negative effect on the daily return of the financial sector and a positive effect on the daily return of the technology sector index. Nevertheless, FFR had a positive significant effect on the daily return of the utilities sector index for the whole period under study. Research limitations/implications The impact of the crisis on the S&P500 index can be assessed only with some limitations owing to available global data and the limited time frame of the lock-down. Practical implications The study proposes supporting a smooth, functioning and resilient financial system; increasing fiscal measures by the US Government to increase liquidity on constraints; measures by The Federal Reserve to alleviate US dollar funding shortages; support market integrity; ensure continuous transparency and sharing of information; support the health sector, as well as consumer-based sectors that faced demand shocks and facilitate investments in the technology sector. Originality/value The originality of this paper lies in the examination of the impact of the novel COVID-19 pandemic on each of the 11 sectors constituting the S&P500 index separately, reflecting how the main economic sectors formulating the US economy reacted to the shock during the peak time of the pandemic to observe a full picture of the economic consequences amid the pandemic.

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