Devaluation of the national currency and the economic security of the State

2021 ◽  
Vol 27 (11) ◽  
pp. 2442-2464
Author(s):  
Dmitrii Yu. FEDOTOV
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Economic Security ◽  
Power Parity ◽  
Russian Economy ◽  
Official Exchange Rate ◽  
The Us ◽  
Macroeconomic Indicators ◽  
The Impact

Subject. This article examines the currency relations formed under the influence of the monetary policy of the Bank of Russia, and the dynamics of the official exchange rate of the ruble against the US dollar and the exchange rate at purchasing power parity. Objectives. The article aims to investigate the impact of changes in exchange rates on the development of the Russian economy. Methods. For the study I used the methods of correlation, logical, and statistical analyses. Results. The article identifies the main objectives of the monetary policy of the Bank of Russia related to the strengthening of the devaluation of the Russian ruble. It reveals a correlation between the dynamics of the official ruble exchange rate and changes in macroeconomic indicators characterizing the economic security of Russia. Conclusions and Relevance. The current monetary policy of the Bank of Russia restrains the country's economic advancement. The results obtained can be used by government authorities when developing currency policy measures.

scholarly journals Exchange Rate Appreciation, International Competitiveness And Purchasing Power Parity: The Shiomi Company Of Japan

2016 ◽  
Vol 12 (3) ◽  
pp. 135-144
Author(s):  
John F. Boschen
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Financial Management ◽  
Nominal Exchange Rate ◽  
Purchasing Power ◽  
Power Parity ◽  
Consumer Prices ◽  
The Us ◽  
Cost Competitiveness ◽  
International Financial Management

In 2011 the ongoing appreciation in the yen against the US$ led Japanese firm Shiomi to consider relocating its production facilities outside of Japan. As a prelude to making this decision, Shiomi commissioned an evaluation of the historical impact of the yen’s appreciation on Japanese competitiveness. This evaluation is the basis for two important lessons in international financial management.  First, it is the real exchange rate, rather than the nominal exchange rate, that determines the relative cost competitiveness of countries. Second, in accordance with the rules of purchasing power parity, the historical evaluation showed that higher inflation in the U.S. relative to Japan caused the ratio of Japanese to U.S. prices to fall at roughly the same rate as the yen’s appreciation against the US$. Thus the long-term appreciation in the yen had little impact on Japanese competitiveness. Students are asked to assess the relocation decision in light of the post-case data on exchange rates and consumer prices supplied in the case. The case is appropriate for use in an international financial management or international economics course.

scholarly journals Productivity Bias Hypothesis: New Evidence from Parallel Market Exchange Rate

ECONOMICS ◽  
2020 ◽  
Vol 8 (1) ◽  
pp. 31-40
Author(s):  
James Temitope Dada ◽  
Philip Akanni Olomola ◽  
Folorunsho Monsur Ajide
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Foreign Exchange Market ◽  
Unit Root Test ◽  
Black Market ◽  
Market Exchange ◽  
Power Parity ◽  
Productivity Data ◽  
Official Exchange Rate ◽  
Market Exchange Rate

AbstractAim/Purpose: The purpose of this study is to investigate Productivity Bias Hypothesis (PBH) in Nigeria using parallel (black) market exchange rate.Design/Methodology/Approach: The study focused on Naira-Dollar (N/$) parallel market exchange rate. Quarterly data from 1995 to 2018 were used. Data on domestic productivity and parallel market exchange rate were sourced from Central Bank of Nigeria (CBN) statistical bulletin, 2018 edition. US productivity data was sourced from Federal Reserve Economic Data. Autoregressive Distributed Lag (ARDL) was used as the estimation technique.Findings: The result reveals that parallel (black) market exchange rate support the presence of productivity bias hypothesis in Nigeria. Furthermore, the purchasing power parity hypothesis was rejected using the conventional unit root test. This implies that using official exchange rate, the study rejects the productivity bias hypothesis.Research Implications/Limitations: The implication of the study is that exchange rate in Nigeria should be determined freely in the foreign exchange market.Originality/Value/Contribution: Previous studies have used official exchange rate to test the validity of the productivity bias hypothesis, and the results can be basically described as mixed. Hence, this study differs from extant studies as it examined productivity bias hypothesis using parallel market exchange rate.

scholarly journals The impact of monetary policy on budgetary balance

2020 ◽  
pp. 128-135
Author(s):  
Nataliia Husarevych ◽  
Yuliya Markuts
Keyword(s):  
Monetary Policy ◽  
Economic Development ◽  
Exchange Rate ◽  
Objective Assessment ◽  
Effective Interaction ◽  
Economic Transformation ◽  
Strategic Objective ◽  
Macroeconomic Indicators ◽  
The Exchange Rate ◽  
The Impact

Relevance of the research topic. In the context of financial globalization, it is important to determine the impact of monetary policy on budgetary balance, ensure sustainable economic development, and support macroeconomic equilibrium in the country. The study of the impact of monetary policy on a balanced budget is very relevant. Formulation of the problem. Under the conditions of transformational changes, the exchange rate and the peculiarities of its formation are an integral part of ensuring the development of the country's financial system. Of particular importance is the issue of ensuring the effective interaction of monetary and budgetary policies as one of the most important factors in the development of the economy through reindustrialization and modernization. Analysis of recent research and publications. The problem of the state’s monetary policy is today quite relevant for most countries of the world and widespread in the scientific works of famous foreign and domestic scientists: T. Bogolib, V. Heyets, I. Zapatrina, J. M. Keynes, N. Kornienko, A. Laffer, I. Lyutyi, A. Mazaraki, R. Masgrayev, V. Makogon, V. Oparin, M. Pasichnyi, A. Smith, J. Stiglitz, V. Fedosov, I. Chugunov, S. Yurii and others. Selection of unexplored parts of the general problem. However, there are a number of insufficiently disclosed issues regarding the impact of exchange rate fluctuations on significant macroeconomic indicators in the context of economic transformation. Setting the task, the purpose of the study. The objective of the study is to analyze the impact of the exchange rate on budgetary balance. The aim of the study is to determine the main objectives of the monetary policy of Ukraine. Method or methodology for conducting research. The article uses a set of scientific methods: the system approach, statistical analysis, structuring, analysis and synthesis. Presentation of the main material (results of work). The article analyzes the exchange rate and determines its effect on the formation of the budget deficit and public debt. The task of modern monetary and foreign exchange policy is delivered, directions of ensuring effective interaction of monetary and budget policies are considered. The field of application of results. The results of this study can be applied in the process of formation and implementation of the monetary policy of Ukraine. Conclusions according to the article. Maintaining balance and stability of budgets of various levels is a strategic objective of budget policy, especially in the context of transformational changes. Budget balance is characterized by the ratio of budget expenditures and revenues, their proportional change in economic uncertainty. It is important to ensure the effective interaction of monetary and budgetary policies as one of the most important factors in the development of the economy through reindustrialization and modernization. The solution of these issues involves an objective assessment of the situation in the domestic and world economies, taking into account the country's real capabilities in achieving the main strategic goals and ensuring economic development.

Impact Of External Shocks And Monetary Policy On Russian Economy

2014 ◽  
pp. 122-139 ◽  
Author(s):  
R. Lomivorotov
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Financial Markets ◽  
Commodity Prices ◽  
External Shocks ◽  
Policy Changes ◽  
Russian Economy ◽  
The Impact ◽  
The U.S

This paper investigates the impact of external and internal shocks on the Russian economy. We have factored in the U.S. monetary policy changes, dynamics of commodity prices, and volatility of global financial markets as the main sources of external shocks. We have also examined the influence of the monetary policy of the Bank of Russia, on economic growth, inflation, and ruble exchange rate.

scholarly journals The Validity of the Purchasing Power Parity Hypothesis for Kuwait

2016 ◽  
Vol 11 (1) ◽  
pp. 188
Author(s):  
Ebrahim Merza
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Purchasing Power Parity ◽  
Unit Roots ◽  
Purchasing Power ◽  
Power Parity ◽  
Monthly Data ◽  
The Real ◽  
The Us ◽  
Augmented Dickey Fuller

Many studies have tested the null hypothesis of the unit root of the real exchange rate to examine the validity of the purchasing power parity (PPP) hypothesis. Previous studies have reached different conclusions regarding that issue. This study tests the hypothesis of PPP in Kuwait using two tests of unit roots, the Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests. Using monthly data from 2006 to 2015, both tests reject the PPP hypothesis for the Kuwaiti economy. Using the components of the real exchange rate, we find that the levels of prices in both Kuwait and the US are not moving together to provide stationarity for the real exchange rate. This result could be attributed to the large increases in the prices of the housing and food and beverages sectors in Kuwait during that time.

Channels and Results of the Latest Sanctions Impacts on the Russian Economy

2020 ◽  
pp. 24-40
Author(s):  
S.V. Kazantsev
Keyword(s):  
Negative Impact ◽  
The United States ◽  
Economic Security ◽  
Russian Economy ◽  
Fixed Assets ◽  
Macroeconomic Indicators ◽  
The One ◽  
Definition Of ◽  
The Impact ◽  
The Eu

The article presents the results of an analysis of the impact of the financial and economic sanctions imposed on Russia by the United States, the EU and a group of countries that joined them in March 2014, which, as we know, were constantly extended and supplemented with further restrictive and prohibitive measures. Auto solved two specific research tasks. This is, first, the definition of channels for sanctions to influence the dynamics of Russia’s economic development. Second, the assessment of the time and strength of the negative impact of sanctions on the values of such macroeconomic indicators as: foreign direct investment and investment (FDI) in fixed assets; fixed assets and their commissioning, gross domestic product (GDP) and industrial production; consumer price indices, real monetary income of the population and final consumption. The use of economic and statistical tools made it possible to determine the years of the most severe impact of anti-Russian sanctions on the listed macroeconomic indicators, which in a certain part are also officially approved indicators of the state of economic security of the country. The similarity of channels and results of sanctions, on the one hand, and global financial and economic crises, on the other hand, is also established.

scholarly journals Purchasing power parity in the Colombian exchange rate

Ánfora ◽  
2018 ◽  
Vol 25 (45) ◽  
pp. 123-143
Author(s):  
Oscar Hernán Cerquera Losada ◽  
Camilo Fabiam Gómez Segura ◽  
Cristian José Arias Barrera
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Imperfect Competition ◽  
Structural Changes ◽  
Social Economic ◽  
Unit Roots ◽  
Purchasing Power ◽  
Power Parity ◽  
The Us ◽  
Us Dollar

Objetive: to determine the fulfillment of the purchasing power parity (PPP) theory in Colombia, the exchange rate with the US dollar using as a standard. Methodology: to check if the PPP in Colombia is achieved, monthly and quarterly data was used, which ran from January 1959 to December 2015. To do this, the longterm behavior from the real exchange rate was modeled, contrasting the unit  roots presence and structural changes. In addition, a bivariate cointegration model  was used. Results: it was found that, in the case of Colombia, the PPP theory was not  fulfilled, since the peso and the dollar are not cointegrated. Therefore, according to the unitary root methodology, the PPP hypothesis in Colombia for the period 1959- 2015 is not validated. Everything seems to indicate that the Colombian peso has little relation with the US dollar. Conclusions: the use of general price indices, which include tradable goods between countries, multiple barriers to international trade, imperfect competition and social, economic, political and cultural differences between both countries are important aspects when explaining the unfulfillment of the PPP

scholarly journals IMPACT OF THE FED’S UNCONVENTIONAL MONETARY POLICY ON THE US FINANCIAL MARKET

2021 ◽  
Vol 9 (3) ◽  
pp. 145-158
Author(s):  
Silvia Trifonova ◽  
◽  
Svilen Kolev ◽  
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rates ◽  
Financial Market ◽  
Unconventional Monetary Policy ◽  
The Us ◽  
Policy Measures ◽  
Us Dollar ◽  
The Exchange Rate ◽  
The Impact

This paper is devoted to the unconventional monetary policy measures implemented by the US Federal Reserve (Fed) after the global financial crisis. The objective is to conduct an empirical analysis and econometric study on the effects of the US Fed non-standard monetary policy measures on the US financial market, namely by observing the reaction on the US 10-year government bond yield, the US stock market via the S&P 500 index, and the exchange rate of the US dollar versus the euro (EUR/USD). The observed period spreads from January 2009 to March 2019, with the use of monthly data. It captures the Fed’s unconventional monetary policy measures, the first steps of the then planned gradual termination of quantitative easing (QE) and lifting of the interest rates, which was reverted in the course of 2019 and 2020. The results from the constructed vector error correction model suggest that Fed’s monetary policy stance continues to influence the changes in the bond yields, the S&P 500 index, and the value of the US dollar through the interest rate, the portfolio balance, and the exchange rate channels. The findings show that the process of normalization of the monetary policy regarding the future interest rates path in the US under the Fed’s monetary policy must be carefully guided. It must be consistent with the macroeconomic conditions and the state of the financial sector. The impact on the developed and emerging markets must be considered as well, with the main aim of avoiding potential serious risks.

Sign in / Sign up

Export Citation Format

Share Document