The Actual Independence of the Governors of the Central Bank of Iraq and its Effects on Inflation for the Period 2003-2017

2021 ◽  
Vol 39 (11) ◽  
Author(s):  
Ehsan Jabr Ashoor ◽  
Esraa Saeed Saleh ◽  
Maytham Elaibi Ismael
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Turnover Rate ◽  
Foreign Currency ◽  
Price Stability ◽  
Foreign Reserves ◽  
Behavioral Indicators ◽  
Executive Authority ◽  
The Law ◽  
Research Period

This research presents indicators that were used In estimating the independence of the Central Bank of Iraq, which distinguish between the law independence (de jure autonomy) and the actual independence (de facto autonomy) for the three central bank governors for the period 2003-2017, through the turnover rate index of governors (TOR). The research also provides a new indicator of the turnover rate of members in the executive authority in Iraq for the same period, and the effects on inflation. The study also outlines a set of behavioral indicators ​​for governors that highlight the effects of actual independence on inflation. The main findings of the research were that the actual independence, in terms of the turnover rate index, gradually decreased for the research period, but the behavioral indicators of the governors showed that they maintain price stability. Therefore, the study presents evidence on the effect of the actual independence on inflation, because of the control of the exchange rate through the foreign currency auction and the decline of foreign reserves.

scholarly journals Instrument of Managing Exchange Market Pressure: Money Supply or Interest Rate

2007 ◽  
Vol 46 (4II) ◽  
pp. 381-394
Author(s):  
M. Idrees Khawaja ◽  
Musleh-Ud Din
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Currency ◽  
Exchange Market ◽  
Foreign Reserves ◽  
Exchange Market Pressure ◽  
Monetary Approach ◽  
Market Pressure ◽  
External Account ◽  
Exchange Rate Depreciation

Exchange market pressure (emp) reflects disequilibrium in money market. The traditional approaches used to examine the disequilibrium in money market include the monetary approach to balance of payments and monetary approach to exchange rate. Under the former approach the variation in foreign reserves helps restore the equilibrium while under the latter one the change in exchange rate does the needful.1 The idea of this study stems from the fact that under the managed float exchange rate regime, changes in foreign reserves or changes in exchange rate in isolation are not a sufficient guide to characterise the external account situation of an economy. For example, exchange rate depreciation can be partially avoided or at least delayed if the central bank injects foreign currency in the forex market by letting its foreign reserves deplete. Alternatively, central bank can build up foreign reserves by purchasing foreign currency from the market against domestic currency. Such intervention would curb the exchange rate appreciation demanded by fundamentals. Therefore, focus on either of the two, that is, movement in exchange rate or variation in foreign reserves, to the complete exclusion of the other, is bound to portray a misleading picture of the external account situation. Given the foregoing a composite variable, that incorporates changes in exchange rate as well as variation in foreign reserves, over a certain period, is needed to characterise the condition of external account. The requisite composite variable has been developed by Girton and Roper (1977) as ‘simple sum of exchange rate depreciation and variation in foreign reserves scaled by monetary base’. They refer to it as exchange market pressure (emp).

Article 219 TFEU

2019 ◽  
Author(s):  
Friedrich Erlbacher
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
European Central Bank ◽  
European Parliament ◽  
Price Stability ◽  
Rate System ◽  
European Central ◽  
Exchange Rate System

Article 111(1) to (3) and (5) EC By way of derogation from Article 218, the Council, either on a recommendation from the European Central Bank or on a recommendation from the Commission and after consulting the European Central Bank, in an endeavour to reach a consensus consistent with the objective of price stability, may conclude formal agreements on an exchange-rate system for the euro in relation to the currencies of third States. The Council shall act unanimously after consulting the European Parliament and in accordance with the procedure provided for in paragraph 3.

Accounting and Auditing of Assets and Liabilities Used When Conducting Business Abroad

Auditor ◽  
2020 ◽  
Vol 6 (10) ◽  
pp. 17-24
Author(s):  
Yuriy Kochinev ◽  
Natalia Neelova ◽  
O. Sobol'
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Russian Federation ◽  
Foreign Currency ◽  
The Russian Federation ◽  
The Exchange Rate ◽  
The Difference ◽  
Foreign Assets

The relevance of the topic is due to changes in PBU 3/2006 "Accounting for assets and liabilities denominated in foreign currency", according to which, from 01.01.2019, all assets and liabilities denominated in foreign currency used by an organization to conduct business outside the Russian Federation are subject to conversion into rubles at the exchange rate of the Central Bank of the Russian Federation on the reporting date for the purpose of accounting. This raises the question of the mechanism of the difference arising from the results of recalculation of the value of foreign assets and liabilities, and its reflection in accounting. In the work proposed and illustrated by examples of recommendations to address the above-mentioned difference in specially designed for this purpose, the register. It also provides recommendations on accounting for transactions with non-monetary items used in activities outside the Russian Federation, expressed in rubles.

General Guidelines for the Conversion of Damages Calculated in Foreign Currency: Tort Claims

2019 ◽  
Vol 28 (1-2) ◽  
pp. 1-14
Author(s):  
Antonio Avalos
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Foreign Currency ◽  
Exchange Rate Risk ◽  
Economic Factors ◽  
Risk Allocation ◽  
Rate Risk ◽  
Legal Arguments ◽  
The Law ◽  
Tort Claims

Abstract This paper contributes to the debate about determining the proper procedures for the conversion of damages calculated in foreign currency into U.S. dollars by offering general guidelines applicable to tort claims. The analysis expands beyond the typical discussion of selecting the appropriate conversion date by examining other relevant economic factors such as exchange rate risk allocation, the application of an adequate interest rate for the calculation of pre- and post-judgment interest, and the implications of the currency in which the plaintiff suffers the loss. While aiming at properly and fairly compensating the plaintiff as the essential goal of the law on damages, the general guidelines for damages conversion presented rely more on economic principles than on legal arguments.

scholarly journals Output Losses from Currency Crises and the Role of Central Bank

2021 ◽  
Vol 10 (3) ◽  
pp. 79-97
Author(s):  
Mahdi Yazdani ◽  
Mohammad Nikzad
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Currency Crises ◽  
Emerging Market ◽  
Negative Effects ◽  
Foreign Reserves ◽  
Positive Effects ◽  
Emerging Market Countries ◽  
Output Losses

Abstract Generally, one of the important issues related to currency crises is the output losses caused by these phenomena. In this study, determinants of output losses and particularly the role of the central bank will be evaluated during currency crises. Moreover, the paper tries to investigate the roles of macroeconomic variables and also monetary, fiscal and exchange rate policies on the output losses during currency crises. In this regard, an econometric model with panel data has been used for emerging market countries during 1980-2016. The results show that currency crises accruing have a positive and significant effect on output losses. While the successful defence of central bank has had the negative effects on the output losses, but it is positive for the unsuccessful defence and the non-intervention or immediate depreciation. However, the role of the macroeconomic condition is important where total foreign reserves can be considered as a buffer against the output losses, while inflation and deviation of the real exchange rate from its trend have had positive effects on the output losses. Finally, the output losses can be reduced by an active monetary, fiscal and exchange rate policies.

scholarly journals International Monetary Frameworks

2021 ◽  
pp. 101-121
Author(s):  
Ulrich Bindseil ◽  
Alessio Fotia
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Currency ◽  
Balance Sheet ◽  
Lender Of Last Resort ◽  
Balance Sheets ◽  
Fixed Exchange Rate ◽  
International Monetary Arrangements ◽  
Recent Developments ◽  
Bank Balance Sheets

AbstractIn this chapter we turn to representing flows of funds in alternative international monetary frameworks, and what global liquidity these different frameworks provide. We first recall some arguments in favour of and against fixed exchange rate systems. We then introduce two international monetary arrangements of the past which imply fixed exchange rates, namely the gold standard and the Bretton Woods system, and recall why both eventually failed. We then turn to three international monetary frameworks in the context of the current paper standard, i.e. fixed exchange rate systems, flexible exchange rate systems, and the European monetary union. We explain the role of an international lender of last resort and related solutions, and how these allow for more leeway in running fixed exchange rate systems. We also show how banks and central bank balance sheets are affected by international flows of funds and the balance of payments. Finally, we briefly review recent developments of foreign currency reserves, being the key central bank balance sheet position in this context.

Nigerian central bank faces short-term debt hazards

2019 ◽  
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Foreign Currency ◽  
Capital Controls ◽  
Financial Inclusion ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Double Digit

Significance Emefiele has vowed that the CBN will significantly increase financial inclusion, recapitalise banks and help the economy achieve double-digit growth over his second term. However, the significant amount of CBN bills in circulation, a key but costly component of the Bank’s recent exchange rate strategy, poses serious medium-term risks. Impacts The CBN's continued focus on exchange rate stability leaves limited space for reducing interest rates over the short term. Effective foreign currency yields of over 10% are appealing for portfolio investors, but a sudden naira slide would prompt major losses. Significant divestment by foreign portfolio investors may make the CBN resort to temporary capital controls to limit damage to the naira.

The Nexus Of Foreign Reserves, Exchange Rate And Inflation: Recent Empirical Evidence From Sri Lanka

2021 ◽  
pp. 139156142098710
Author(s):  
Ayesh Ariyasinghe ◽  
N. S. Cooray
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Exchange ◽  
Bounds Testing ◽  
Foreign Reserves ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Viable Solution ◽  
Cointegration Relationship

The conventional mandates of the central banks on meeting stability objectives and maintaining a growth-maximizing inflation rate have come under some criticism since the global financial crises. Maintaining adequate foreign reserves is seen as a viable solution to foreign exchange liquidity needs during crisis periods. Since the end of 2011, many Asian economies, including China and Japan, led from the forefront in central bank-led reserves build-up. However, reserves build-up remains challenging and sensitive for small open economies. Such policies help create ‘risk-neutral’ buffers for monetary and fiscal authorities to absorb transitory current account shocks and foreign exchange stress to smoothen the balance of payments. This study is motivated by the importance of identifying the inflation–foreign reserves nexus that may affect inflation in a manner counterproductive to the central bank mandate of maintaining price stability. It probes the debate of the sustainability of reserves build-up in the long and the short term. The outcome of the study poses several vital questions for fiscal and monetary policymakers concerning their respective mandates. The reserves–inflation nexus and its magnitude is determined using monthly data spanning two decades, through engaging an autoregressive distributed lag (ARDL) model and relevant bounds-testing techniques proposed by Pesaran et al. The vector autoregression (VAR), error correction and Johansen cointegration methods supplement the robustness checks. Exchange rate is introduced to enrich the discussion on the reserves–inflation nexus and shows a cointegration relationship in the long run. The study provides an insight into the influence of exchange rate on reserves and inflation. The variance decomposition shows the presence of a lukewarm response from foreign reserves and exchange rate on inflation. Policymakers concerned with inflationary expectations in the medium-to-long term need to consider these signals, as reserves build-up is one of the important policy-driven objectives for a number of economies.

CENTRAL BANK INTERVENTION AND EXCHANGE RATE BEHAVIOR: EMPIRICAL EVIDENCE FOR INDIA

2015 ◽  
Vol 60 (02) ◽  
pp. 1550016
Author(s):  
TAKESHI INOUE
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Exchange Rate Volatility ◽  
Forward Rate ◽  
Central Bank Intervention ◽  
Monthly Data ◽  
Indian Central ◽  
Rate Behavior

This paper examines the causal relationship between central bank intervention and exchange rate returns in India. Using monthly data from December 1997 to December 2011, the empirical results derived from the CCF approach of Cheung and Ng [Journal of Econometrics72 (1996) 33–48] suggest that there is causality-in-variance from exchange rate returns to central bank intervention, but not vice versa. These findings are robust in the sense that they hold in cases where the returns were measured from either the spot rate or the forward rate. Therefore, we conclude that the Indian central bank has intervened in the foreign exchange market to respond to exchange rate volatility, although the volatility has not been influenced by central bank intervention in the form of net purchases of foreign currency in the market.

The Foreign Currency Exchange Rate Policy Up Until 1986

2020 ◽  
pp. 209-229
Author(s):  
Einar Lie
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Currency ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
International Exchange ◽  
Currency Exchange ◽  
Currency Exchange Rate ◽  
Rate Policy ◽  
The Government

This chapter studies how Norges Bank came to play a central, technical role in maintaining and defending a stable krone exchange rate during the years 1946–86. This role was reflected in how the bank advised on the basis of a loyal position to the fixed krone exchange rate regime and to binding international exchange rate cooperation. In 1978, Norway backed out of the European fixed exchange rate cooperation, and during 1976–86, the krone was devalued ten times. Even though Norges Bank officially came to contribute to both recommending and carrying out this policy, the policy defied the strong ideals and viewpoints of the organization. The exchange rate policy, and the problems it led to in relation to the central bank, caused the government, in the first half of the 1980s, to push Norges Bank completely aside when it came to the shaping of Norwegian exchange rate policy. Nevertheless, much of the policy was still shaped inside the walls of the institution.

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