The Rise of the Dollar and Fall of the Euro as International Currencies

2019 ◽  
Vol 109 ◽  
pp. 521-526 ◽  
Author(s):  
Matteo Maggiori ◽  
Brent Neiman ◽  
Jesse Schreger
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Exchange Rate Regimes ◽  
Bank Loans ◽  
Foreign Exchange Reserves ◽  
Government Bonds ◽  
International Currency ◽  
International Currencies ◽  
Import And Export ◽  
Exchange Markets

International currencies play important roles as foreign exchange reserves but are also most frequently used to denominate corporate and government bonds, bank loans, and import and export invoices. These currencies offer unrivaled liquidity, constituting large shares of the volume on global foreign exchange markets, and are commonly chosen as the anchors targeted by countries with pegged or managed exchange rate regimes. We provide evidence suggesting a recent rise in the use of the dollar, and fall of the use of the euro, with similar patterns manifesting across all these aspects of international currency use.

scholarly journals Currency Democracy: The Theory of Organic Global Monetary - Summary

2020 ◽  
Author(s):  
Abdurrahman Arum Rahman
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Economic Integration ◽  
Foreign Debt ◽  
Foreign Exchange Reserves ◽  
Middle Income ◽  
National Currencies ◽  
International Currencies ◽  
The World ◽  
Trade Wars

We proposed a model of democratic and symmetrical international monetary without the need for economic integration. The model name is “organic global monetary” (OGM) or simply called “organic model”. The organic model is an international currency system developed jointly by all countries in the world, or member countries and is part of their respective national currencies. The organic model is natural, elegant, and very comprehensive, provides international currencies “free of charge” to all member countries, does not require foreign exchange reserves, eliminates exchange rate cost and fluctuations, makes “zero-depreciated” international currencies, eliminates foreign debt dependence, abolishing trade wars at all levels, releases countries from the middle-income trap (MIT); eliminates global imbalances, and completely eliminate currency crisis.

scholarly journals ANALYSIS OF MACROECONOMIC EFFECTS ON THE YIELD OF CORPORATE BONDS IN INDONESIA

2020 ◽  
Vol 1 (3) ◽  
pp. 300-310
Author(s):  
Anastasia Sianturi ◽  
Pardomuan Sihombing
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Corporate Bonds ◽  
Oil Price ◽  
Corporate Bond ◽  
Foreign Exchange Reserves ◽  
Monthly Data ◽  
Factors Affecting ◽  
Macroeconomic Effects ◽  
Positive Effect

This study aims to examine and obtain empirical evidence of the effects of inflation, BI rate, exchange rate, foreign exchange reserves and the oil price to yield corporate bonds in Indonesia. An increase in the number of issuers and corporate bond issuance value in Indonesia means that many companies are using and seek financing through the issuance of bonds. Several studies have been conducted, inconsistencies results of research on factors affecting yield corporate bonds in Indonesia. This study uses a quantitative approach to the type of associative causal research. Measurement of variables in this study using a time series analysis were processed using Eviews program 10. This research was conducted using monthly data within the period of 2015 to 2018. The results of this research that inflation positively affects yield corporate bonds. BI rate has a positive effect on the yield of corporate bonds. Exchange rate positive effect on the yield of corporate bonds. Foreign exchange reserves negatively affect yield corporate bonds. Oil price positive effect on the yield of corporate bonds.

scholarly journals Modeling Sources of Asymmetry in the Volatility of the Moroccan Dirham Exchange Rate

2021 ◽  
Vol 8 (4) ◽  
pp. 31
Author(s):  
KHATTAB Ahmed ◽  
SALMI Yahya
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Selection Criterion ◽  
Econometric Models ◽  
Interbank Market ◽  
Foreign Exchange Reserves ◽  
Central Bank Intervention ◽  
The Exchange Rate

The main objective of this paper is to study the sources of asymmetry in the volatility of the bilateral exchange rates of the Moroccan dirham (MAD), against the EUR and the USD using the asymmetric econometric models of the ARCH-GARCH family. An empirical analysis was conducted on daily central bank data from March 2003 to March 2021, with a sample size of 4575 observations. Central bank intervention in the foreign exchange (interbank) market was found to affect the asymmetry in the volatility of the bilateral EUR/MAD and USD/MAD exchange rates. Specifically, sales of foreign exchange reserves by the monetary authority cause a fall in the exchange rate, which means that the market response to shocks is asymmetric. Finally, the selection criterion (AIC) allowed us to conclude that the asymmetric model AR(1)-TGARCH(1,1) is adequate for modeling the volatility of the exchange rate of the Moroccan dirham.

scholarly journals An Approach of Vector Autoregression Model for Inflation Analysis in Indonesia

2018 ◽  
Vol 20 (3) ◽  
Author(s):  
Idah Zuhroh ◽  
Hendra Kusuma ◽  
Syela Kurniawati
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Foreign Exchange ◽  
Vector Autoregression ◽  
Negative Relationship ◽  
Foreign Exchange Reserves ◽  
Monthly Data ◽  
Vector Autoregression Model ◽  
Autoregression Model ◽  
The Stability

A control of the inflation rate caused by the fluctuations in foreign exchange reserves, money supply, and exchange rate is required to create the stability of the country's economy. This study aims to analyze the dynamic impact of disturbance factors contained in the variables of foreign exchange reserves, the money supply, and the exchange rate. This research used monthly data from June 2009 to November 2016. It used a method used of Vector Autoregression. The result shows that a foreign exchange reserve has a negative relationship nut not significant effect on inflation, money supply has positive relationship and significant effect on inflation, and exchange rate of rupiah to US dollar has negative relationship and significant effect on inflation. The responce of inflation from shocking occurs to supply, foreign exchange reserves and exchange rate tend to be convergent and the biggest contribution that influences inflation the most is exchange rate beside inflation itself.

The influence of USD/CNY foreign exchange rate, RMB NEER and spatial effects on China’s foreign trade

2016 ◽  
Vol 6 (3) ◽  
pp. 304-318 ◽  
Author(s):  
Hua Wang ◽  
Junjun Zhu
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Export Trade ◽  
Content Type ◽  
Spatial Panel ◽  
Panel Model ◽  
Chinese Export ◽  
Import And Export ◽  
Spatial Panel Model ◽  
Percent Decline

Purpose – The purpose of this paper is to analyze the influence of different forms of RMB foreign exchange rates on Chinese foreign trade. Design/methodology/approach – This paper constructed spatial panel model and Markov Chain Monte Carlo estimation method and collected the data of 25 countries’ (including China) quarterly macroeconomic data from first quarter of 1993 until third quarter of 2013 to conduct the data analysis. Findings – This paper finds that USD/CNY, which is widely used in trade settlement, is more significant in effecting Chinese export. Totally, 1 percent appreciation of CNY against USD will lead to 1.532 percent decline of Chinese export, while 1 percent appreciation of CNY NEER only 0.42 percent. What is more, 1 percent increases of the volatility of USD/CNY results in 0.579 percent decline of Chinese export. As policy suggestions, we should further reform the foreign exchange derivative market in China, and provide more currency derivatives, so that the ability of Chinese economy to deal with foreign exchange risk could be improved. Research limitations/implications – Effect of exchange rate on imports and exports relates to the future direction of China’s exchange rate policy. This paper claims that China should accelerate the construction of foreign exchange derivatives market, improving the ability to respond quickly to foreign currency risk. Practical implications – First, denominated exchange rate has more significant impact on the Chinese export trade to other countries than effective exchange rate. Second, the RMB exchange rate fluctuations also significantly affect the export trade. Third, China’s import and export trade have significant spatial effect. Social implications – This paper recommends the construction of the RMB currency futures market as soon as possible, providing a richer foreign exchange derivatives and other risk hedging instruments, thus to enhance the ability to respond to exchange rate risks. Originality/value – This paper uses spatial panel model with the refined data to study various factors on the import and export trade, and thus more comprehensive analysis on the impact of the exchange rate on the import and export trade with other major countries.

The long-run effects of geopolitical risk on foreign exchange markets: evidence from some ASEAN countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hon Chung Hui
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Risk Index ◽  
Foreign Exchange Markets ◽  
Content Type ◽  
Long Run ◽  
Exchange Markets ◽  
Exchange Rate Models ◽  
Asean Countries

PurposeThe purpose of this paper is to analyse the long-run relationship between geopolitical risk and exchange rates in four ASEAN countries.Design/methodology/approachWe augment theoretical nominal exchange rate models available in the literature with the geopolitical risk index developed by Caldara and Iacoviello (2019), and then estimate these models using the ARDL approach to Cointegration.FindingsOur analysis uncovers evidence of Cointegration in the exchange rate models when the MYR-USD, IDR-USD, THB-USD and PHP-USD exchange rates are used as dependent variable. Next, geopolitical risk is a significant long-run driver for these exchange rates. Third, in all countries higher geopolitical risk leads to a depreciation of domestic currency.Research limitations/implicationsThere are implications for entrepreneurs, central banks, portfolio managers and arbitrageurs who actively trade in financial markets. Financial market players can benefit from a better understanding of how geopolitical events affect the portfolio of financial assets across various countries, while entrepreneurs can work out hedging strategies.Originality/valueThis is a contribution to the study of interlinkages between political risk and foreign exchange markets. It is the first study to adopt the geopolitical risk index of Caldara and Iacoviello (2019) to the study the foreign exchange markets of ASEAN countries.

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