scholarly journals SPECULATIONS ON THE FOREIGN EXCHANGE MARKET OF UKRAINE

2021 ◽  
Vol 2021 (2) ◽  
Author(s):  
D. Bychenko
Keyword(s):  
Interest Rates ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Market Development ◽  
Exchange Market ◽  
Positive Side ◽  
Exchange Markets ◽  
The Difference ◽  
The Moment ◽  
The Impact

The foreign exchange market gives a great impetus to economic development and is one of the most critical parts of the financial market. The global daily turnover in the foreign exchange markets (FOREX) has exceeded USD 6.7 billion. At the same time, speculation in the markets gives a qualitative impetus to its development. Of course, it can partially destabilize the situation with quotations due to their ignorance, but in most cases, it is also helpful for the general state of the market. These concepts were studied by the founder of modern economics - J. Keynes, and foreign scientists M. Poyarliev and J. Levych, and Ukrainian scientists also did not bypass this issue. They considered more the peculiarities of the development of the foreign exchange market of Ukraine and the basics of its regulation. Furthermore, only a few considered the process of hedging currency risks and, in part, speculation. The primary purpose of this article is to study the role of speculation in the foreign exchange market of Ukraine and assess their impact on the foreign exchange market development in recent years. We have achieved this goal, namely to consider the main trends of the foreign exchange market in the last three years. On the positive side, Ukraine has already moved away from maintaining the exchange rate, and the NBU is trying to accumulate certain reserves. It is not easy to trace the positive dynamics in the foreign exchange market development due to the impact of pandemic-related lockdowns. There is a noticeable tendency in the market to devalue the Ukrainian hryvnia. We will also consider the types of traders and their main strategies. Pay special attention to care trade and momentum as the most profitable in the foreign exchange market. The core trade is based on the investor's desire to benefit from the difference in interest rates on different currencies, taking into account the risks. The moment is already based on technical analysis from the trader to decide to invest. This study will be helpful for both students and researchers studying financial markets, especially the foreign exchange market. Perhaps ordinary citizens of Ukraine will take it into account and expand their knowledge in the field of investment and trading in currency pairs because a similar article that would it did not concern the Ukrainian market, which is the value of this work.

scholarly journals The recommendations of the De Kock Commission of Inquiry and its implications for foreign security investments by South African residents

1985 ◽  
Vol 16 (4) ◽  
pp. 204-208 ◽  
Author(s):  
N. Bhana
Keyword(s):  
South Africa ◽  
Interest Rates ◽  
South African ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
Rates Of Return ◽  
Local Exchange ◽  
International Portfolio Diversification ◽  
Exchange Control

South African investors have been precluded from investing in foreign securities by the Exchange Control Regulations of 1961. Furthermore, the monetary policy pursued by the authorities has resulted in an inefficient financial market. Investments on the capital market have not earned satisfactory real rates of return, and prices on the JSE appear to have been driven to artificial heights. The De Kock Commission of Inquiry has proposed several recommendations which will have far-reaching consequences for investors in South Africa. The proposal of market-related interest rates and the abolition of prescribed investments by institutional investors is likely to result in long-term securities earning substantially higher real rates of return. The relaxation of exchange control for both direct and portfolio investment is likely to stem the flow of funds into the JSE. Investment funds can be expected to flow between the JSE and the various foreign equity markets depending on the economic prospects in the different countries. The high foreign exchange cost and poor liquidity of the local exchange market has been an obstacle to investors in foreign securities. The creation of a larger and more efficient foreign exchange market is likely to facilitate international portfolio diversification in South Africa.

scholarly journals Transmission Of Volatility Shocks Between The Equity And Foreign Exchange Markets In South Africa

2013 ◽  
Vol 29 (5) ◽  
pp. 1529 ◽  
Author(s):  
Lumengo Bonga-Bonga
Keyword(s):  
South Africa ◽  
South African ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Impulse Response Function ◽  
Equity Market ◽  
Stock Market Volatility ◽  
Exchange Market ◽  
Conditional Volatility ◽  
Exchange Markets

<p>The paper assesses the dynamic interaction between exchange rates and stock market volatility in South Africa by making use of the generalised impulse response function obtained from a bivariate VAR model. Volatility variables in the VAR system are obtained from a family of GARCH models based on criteria such as covariance stationarity and leverage effects. The findings of the paper show that foreign exchange conditional volatility responds positively to volatility shocks to the equity market. Nonetheless, the response of the equity market conditional volatility to volatility shocks to the foreign exchange market is short-lived and neutral for most of the time horizon periods. The paper attributes this finding mainly to the extent of foreign participation in emerging equity market in general and the South African equity market in particular.</p>

scholarly journals Covered interest arbitrage opportunities in the South African foreign exchange market

1987 ◽  
Vol 18 (4) ◽  
pp. 209-214
Author(s):  
C. De J. Correia ◽  
R. F. Knight
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
South African ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
The South ◽  
Dollar Exchange Rate ◽  
Interest Parity ◽  
Interest Differential

The Interest Parity Theory states that in an efficient market, any interest differential between local and foreign sources of finance will be offset by the forward premium/discount. Therefore, opportunities to engage in profitable Covered Interest Arbitrage transactions will be eliminated quickly. The fall in the Rand/Dollar exchange rate resulted in many South African companies reporting substantial foreign exchange losses on offshore loans. Companies were attracted to foreign sources of finance because of lower foreign interest rates. The authors conclude, on the basis of empirical tests, that the forward Rand/Dollar exchange rate followed its interest parity value very closely over the period August 1983 - August 1985. Opportunities to engage in risk-free arbitrage activities were offset by related transaction costs. The South African foreign exchange market is efficient to the extent that risk-free profit opportunities did not exist for the period under review and therefore there was no benefit, after adjusting for risk, for South African management to borrow from offshore sources of finance.

scholarly journals Alarming of exchange rate crisis: A risk management approach

2016 ◽  
Vol 6 (2) ◽  
pp. 79-88
Author(s):  
Da Zhao ◽  
Tianhao Wu
Keyword(s):  
Risk Management ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Management Approach ◽  
Exchange Market ◽  
Sample Data ◽  
Out Of Sample ◽  
Exchange Markets ◽  
Development Levels

Recently, with increasing volatility of foreign exchange rate, risk management becomes more and more important not only for multinational companies and individuals but also for central governments. This paper attempts to build an econometrics model so as to forecast and manage risks in foreign exchange market, especially during the eve of turbulent periods. By following McNeil and Frey’s (2000) two stage approach called conditional EVT to estimate dynamic VaR commonly used in stock and insurance markets, we extend it by applying a more general asymmetric ARMA-GARCH model to analyze daily foreign exchange dollar-denominated trading data from four countries of different development levels across Asia and Europe for a period of more than 10 years from January 03, 2005 to May 29, 2015, which is certainly representative of global markets. Conventionally, different kinds of backtesting methods are implemented ultimately to evaluate how well the model behaves. Inspiringly, test results show that by taking several specific characteristics (including fat-tails, asymmetry and long-range dependence) of the foreign exchange market return data into consideration, the violation ratio of out-of-sample data can be forecasted very well for both fixed and flexible foreign exchange regimes. Moreover, all of the violations are evenly distributed along the whole period which indicates another favorable property of our model. Meanwhile, we find evidence of asymmetry volatility in all of the studied foreign exchange markets even though the magnitudes of the most of them are weak.

scholarly journals Central bank's communication and markets' reactions: Polish evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Janusz Brzeszczyński ◽  
Jerzy Gajdka ◽  
Tomasz Schabek ◽  
Ali M Kutan
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Financial Market ◽  
Foreign Exchange Market ◽  
Emerging Market ◽  
Public Information ◽  
Exchange Market ◽  
Market Segments ◽  
Content Type ◽  
The Impact

PurposeThis study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging markets.Design/methodology/approachEmpirical analysis is executed using the National Bank of Poland (NBP) announcements about its monetary policy covering the data from the broad financial market in its three main segments: stock market, foreign exchange market and bonds market. The reactions are measured relative to the changes in the NBP announcements and also with respect to investors' expectations. Autoregressive conditional heteroscedasticity (ARCH) models with dummy variables are used as the main methodological tool.FindingsBonds market and foreign exchange market are the most sensitive market segments, while interest rate and money supply are the most influential types of announcements. The changes of the revealed new macroeconomic figures had more impact on assets' prices movements than the deviations from their expectations. Moreover, greater diversity of the Monetary Policy Council (MPC) members' opinions on the voted motions, captured in the MPC voting reports, is associated with more cases of statistically significant NBP communication events.Practical implicationsThe findings have direct relevance for fund managers, portfolio analysts, investors and also for financial market regulators.Originality/valueThe results provide novel evidence about how the emerging financial market responds to monetary policy announcements. They help understand the nature of the impact of public information on financial assets' valuation and on movements of their prices, analysed comprehensively in three market segments, in the emerging market environment.

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