scholarly journals PERBEDAAN MANAGED FLOAT EXCHANGE RATE SYSTEM DAN FREELY FLOATING EXCHANGE RATE SYSTEM DI INDONESIA

2003 ◽  
Vol 2 (2) ◽  
Author(s):  
Mudji Utami
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Relative Rate ◽  
Supply And Demand ◽  
Rate System ◽  
Float Exchange Rate ◽  
Significant Difference ◽  
Floating Exchange Rate ◽  
Floating System ◽  
Exchange Rate System

Consequence of the freely floating system and freely foreign exchange system, rupiah could he easily fluctuated, because exchange rate shift not in response but as governed by the interaction between supply and demand in the money markets. The supply and demand forces are influenced by the relative interest rate and relative of inflation. Thus this study examine whether there is a difference of magnitude in the influence of the relative interest rate and relative rate of inflation to the USD - IRD exchange rate when Indonesia adopts respectively the managed float exchange rate system and the freely floating exchange rate system. The finding shows at the level of confidence 95%, that there is no significant difference in the influence of the relative interest rate and relative rate of inflation to the USD - IRD exchange rates between both systems.

Exchange Rate and Industry-Level Energy Import

2021 ◽  
pp. 71-86
Author(s):  
Abdul Sahib ◽  
Sergey Prosekov
Keyword(s):  
Exchange Rate ◽  
Supply And Demand ◽  
Exchange Rate Volatility ◽  
Trade Flows ◽  
Level Energy ◽  
Rate System ◽  
Domestic Prices ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
The Impact

After the Bretton Woods exchange rate system in 1973, the free-floating exchange rate, the rate determined by the forces of supply and demand, began, which developed an interest in the area of many researchers to investigate, theoretically and empirically, the impact of exchange rate volatility on the world trade flows. There are two channels, direct and indirect, through which the change in exchange rate affects domestic prices. Under the direct channel, a fall in exchange rate leads to increase in imports as well as increases the prices of inputs in domestic currency. Secondly, under the indirect channel, a decline in the exchange rate triggers the availability of domestic goods to foreign buyers at a cheaper rate, and the demand for domestic products increased. Thus, the change in exchange rate affects trade flows either positively or negatively.

CHINA’S EXCHANGE RATE SYSTEM REFORM: TWO POTENTIAL MISTAKES AND THE RECOMMENDED LONG-TERM SYSTEM

2016 ◽  
Vol 61 (02) ◽  
pp. 1640025
Author(s):  
PAUL S. L. YIP
Keyword(s):  
Exchange Rate ◽  
Capital Mobility ◽  
Exchange Rate Policy ◽  
Chinese Economy ◽  
System Reform ◽  
Rate System ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Exchange Rate System

Further to the author’s recommended transitory and medium-term exchange rate system reforms that was implemented in China since July 2005, this paper explains that: (1) a long-term reform towards a floating exchange rate system with free capital mobility will cause huge damages to the Chinese economy. It then proposes a long-term exchange rate system that would probably benefit China the most; and (2) there is a serious mistake in China’s latest exchange rate policy: The Chinese central bank has mistakenly allowed the renminbi exchange rate to rise with the strong rebound of the US dollar. This will cause not only a substantial drag in China’s export and GDP growth, but will also eventually make China’s financial and economic system vulnerable to a highly disruptive correction in the renminbi exchange rate.

MANAGING EXCHANGE RATE VOLATILITY: A COMPARATIVE COUNTERFACTUAL ANALYSIS OF SINGAPORE, 1994–2003

2009 ◽  
Vol 54 (04) ◽  
pp. 543-568 ◽  
Author(s):  
PETER WILSON ◽  
HENRY SHANG REN NG
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
East Asian ◽  
Exchange Rate Volatility ◽  
Rate System ◽  
The Us ◽  
Floating Exchange Rate ◽  
Effective Exchange ◽  
Exchange Rate System ◽  
Effective Exchange Rate

This paper looks at how Singapore's exchange rate regime has coped with exchange rate volatility, by comparing the performance of Singapore's actual regime in minimizing the volatility of the nominal effective exchange rate (NEER) and the bilateral rate against the US dollar with some counterfactual regimes and the corresponding performance of eight other East Asian countries. In contrast to previous counterfactual exercises, we apply a more disaggregated methodology for the trade weights, a larger number of trade partners and ARCH/GARCH techniques to capture the time-varying characteristics of volatility. Our findings confirm that Singapore's managed floating exchange rate system has delivered relatively low currency volatility. Although there are gains in volatility reduction for all countries in the sample from the adoption of either a unilateral or a common basket peg, particularly post-Asian crisis, these gains are relatively low for Singapore, largely because of low actual volatility. There are additional gains for non-dollar peggers from stabilizing intra-east Asian exchange rates against the dollar if they were to adopt a basket peg, especially post-crisis, but the gains for Singapore are again relatively modest. Finally, the conclusion from previous counterfactual studies that there is little difference between a unilateral basket peg and a common basket peg in terms of stability reduction is confirmed.

Effects of exchange rate and income on the US bilateral trade with China under Chinese managed floating exchange rate system

2018 ◽  
Vol 11 (3) ◽  
pp. 236-246 ◽  
Author(s):  
Yongqing Wang
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Trade Deficit ◽  
Rate System ◽  
Content Type ◽  
Long Run ◽  
The Us ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
Us Dollar

Purpose China’s exchange rate system remains a public concern. This paper aims to investigate the effects of the appreciation of the US dollar (or depreciation of Chinese Yuan) under China’s “managed floating exchange rate system” on the US bilateral trade deficit with China, the US exports to China and the US imports from China. Design/methodology/approach The author uses quarterly data from 2005Q3 to 2017Q3 and applies autoregressive distributed lags model to carry out the empirical analysis. Findings The results suggest that both the US and Chinese income are important determinants of the US bilateral trade deficit with China, the US exports to China and the US imports from China. Further, the appreciation of the US dollar with respect to Chinese currency may discourage the US exports to China, but will not considerably promote the US imports from China in the long run. Finally, the appreciation of the US dollar does not contribute significantly to the US trade deficit with China in the long run. Originality/value Policymakers may want to pay attention to the results of currency depreciation on bilateral trade flows and trade balance in both the short and the long run. The results are different. Policymakers may also want to keep the following in mind: both the US and Chinese income are vital factors of bilateral trade balance, exports and imports.

scholarly journals The Swiss National Bank’s fear of float

2019 ◽  
Vol 8 (2) ◽  
pp. 51-64
Author(s):  
Kristin Berthold ◽  
Georg Stadtmann
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rates ◽  
Open Economy ◽  
Small Open Economy ◽  
Rate System ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
Relative Ppp ◽  
The Empirical Analysis

Abstract We theoretically examine under which assumptions the impossible trinity holds. We also focus on the most recent Swiss experience and ask whether the SNB gained monetary independence by switching from a fixed to a floating exchange rate system in January 2015. The theoretical examination shows that the impossible trinity holds under the following assumptions: Equality of domestic and foreign real interest rates, the quantity theory of money holds, and that the relative PPP is fulfilled. The empirical analysis reveals that relative PPP does not hold for the Swiss case and it was necessary for the SNB to adopt its monetary policy in accordance with the ECB’s expansionary monetary policy. We show that for a small open economy, such as Switzerland, whether the central bank implements a fixed or a floating exchange rate system does not play a role in its monetary policy independence.

scholarly journals Debt, Growth, and Poverty in the International Monetary System (The Quaid-i-Azam Memorial Lecture)

2001 ◽  
Vol 40 (4I) ◽  
pp. 283-314
Author(s):  
Robert A. Mundell
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
International Monetary System ◽  
Memorial Lecture ◽  
Rate System ◽  
Currency Area ◽  
Monetary System ◽  
Fixed Exchange Rate ◽  
Floating Exchange Rate ◽  
Exchange Rate System

This paper explores the relationship between debt, growth, and poverty and the international monetary system. With a well-functioning international monetary system, economic policy works well, instruments are assigned to targets appropriately, and discipline is maintained. The fixed exchange rate is contrasted with alternative monetary rules. The monetary rule is the weakest system; monetary targeting has failed in every country in which it has been tried. An advantage of the fixed exchange rate is the clue it provides to the price level, interest rate, and future monetary policy. Other things being equal, the use of a currencies basket is inferior to a single currency peg, while a freely floating exchange rate system puts itself at the mercy of speculators. The paper points out the conditions for a successful currency area as a consensus on a common inflation rate; a common basket of goods with which to measure inflation; exchange rate that must be locked; member countries must adopt a common monetary policy; and a formula must be devised for distributing and using the seigniorage profits from monetary expansion. There is a need to study the possibility of an Asian currency area and the links between the APEC and the SAARC. Regular and mutual surveillance on monetary, fiscal, and exchange rate convergence, and policies that minimise exchange rate uncertainty and work towards a currency club area based on a common anchor— initially the dollar—are needed. Setting up of an Asian Monetary Fund is also suggested, one that is closely modelled on the original IMF articles of agreement and will provide an anchored fixed exchange rate system.

scholarly journals HUBUNGAN KAUSAL DINAMIS ANTARA VARIABEL-VARIABEL MONETER UTAMA DAN OUTPUT: KASUS INDONESIA DI BAWAH SISTEM NILAI TUKAR MENGAMBANG DAN MENGAMBANG TERKENDALI

2007 ◽  
Vol 9 (1) ◽  
Author(s):  
Latif Kharie
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Interest Rate ◽  
Impulse Response Function ◽  
Real Output ◽  
Rate System ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
Managed Floating ◽  
Floating Exchange Rates

The objective of the study is to analyze the dynamic causal relationship pattern and the characteristic among the primary monetary variables and output under a different exchange rate systems, i.e the floating and managed floating exchange rate system. The model formulated on this study is based on Taylor rule, state contingent rule, and some theories such as monetary transmission mechanism, exchange rate determination, and Keynes’s demand for money and its augmented models.The type of the study is explanatory research. Variables analyzed consists of real interest rates of Sertifikat Bank Indonesia, real money supply, real exchange rates of rupiah to American dollar, prices and real output. The data used was monthly time series. Sources of data are Bank Indonesia, Badan Pusat Statistik and International Monetary Fund reports, and analyzed for two different periods of observation. The vector error correction model is used as a quantitative model, focuses on the impulse response function analysis.The results of impulse response function indicate that: (i) the response of monetary policy to changes of real output and price under the floating exchange rate system is positive, and to changes of real exchange rate and price under the managed floating exchange system is also positive; (ii) the response of price to changes of real interest rate, real money supply, real exchange rate and real output under the floating exchange rate system are negative, negative, positive and negative respectively, whereas under the managed floating exchange rates system are negative, positive, negative and positive respectively; and (iii) the response of real output to change of real interest rate under the floating exchange rates system is positive but it is negative under the managed floating exchange rates system.Keywords: dynamic causal relation, primary monetary variables, output, floating rates system, managed floating exchange rates systemJEL Classification: C32, E52, O24

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