scholarly journals Role of Oil Prices in Exchange Rate Devaluation: Risks of the Russian Ruble and Other Currencies

2019 ◽  
Vol 16 (4) ◽  
pp. 76-81
Author(s):  
V. Yu. Didenko ◽  
N. I. Morozko ◽  
N. I. Morozko
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Current Account ◽  
Foreign Exchange Market ◽  
Oil Prices ◽  
Balance Of Payments ◽  
Exchange Market ◽  
The Exchange Rate

Subject and topic. Currently, the decrease in payments on foreign debts and a decrease in imports have an impact on the demand in the foreign exchange market. As a result, a situation has arisen due to the actions of the Bank of Russia, caused by threats of sanctions that provoked the absence of excessive demand and adequate supply in the foreign exchange market and led to a decrease in ruble exchange rate fl uctuations due to oil price movements.The subject of research is to determine the role of oil prices in the formation of monetary policy, which can be a key driver of economic growth.Objective. Identifi cation of exchange rate management practices with the search for the relationship between the current account of the balance of payments and the volatility of the national currency exchange rate.Research methods, the main provisions. Methods used grouping, comparing and summarizing economic indicators to study the characteristics and trends of the monetary policy of China, South Korea and Latin American countries.A critical analysis of the various points of view of leading scientists on the negative or positive impact of the exchange rate on the development of the economy was carried out. At the same time, it is interesting to analyze the views of individual economists that the dependence of the ruble exchange rate on oil prices has recently largely decreased.The main results of the study. Determination of the theoretical relationship between the price of oil and the exchange rate, based on the shock component, either in oil prices or in the exchange rate, with testing the response of the economic variable to this shock.Main conclusions. It was concluded that in the conditions of the economic situation of the last decade, the main problem of export-oriented and import-oriented countries is the imbalance of the current account of the balance of payments, as well as its relationship, primarily with the prices of export goods.

Optimistic and pessimistic economic sentiments and US Dollar exchange rate

2021 ◽  
Author(s):  
Sonia Kumari ◽  
Suresh Kumar Oad Rajput ◽  
Rana Yassir Hussain ◽  
Jahanzeb Marwat ◽  
Haroon Hussain
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Ordinary Least Squares ◽  
Exchange Market ◽  
Dollar Exchange Rate ◽  
The Us ◽  
Short Run ◽  
Us Dollar ◽  
The Exchange Rate

This study investigates the affiliation of various proxies of economic sentiments and the US Dollar exchange rate, mainly focusing on the real effective exchange rate of USD pairing with three other major currencies (USDEUR, USDGBP, and USDCAD). The study has employed Google Trends data of economy optimistic and pessimistic sentiments index and survey-based economy sentiments data on monthly basis from January 2004 to December 2018. The study engaged Ordinary Least Squares (OLS) and Auto-Regressive Distributed Lag (ARDL) estimation techniques to evaluate the short-run and long-run effects of economy-related sentiments and macroeconomic variables on the exchange rate. The results from the study found that Economy Optimistic Sentiments Index (EOSI) and Economy Pessimistic Sentiments Index (EPSI) appreciate and depreciate the US Dollar exchange rate in the short-run, respectively. Our sentiment measures are robust to survey-based Michigan Consumer Sentiment Index (MSCI), Consumer Confidence Index (CCI), and various macroeconomic factors. The MSCI and CCI sentiments show a long-term impact on the foreign exchange market. This study implies that economic sentiments play a vital role in the foreign exchange market and it is essential to consider behavioral aspects when modeling the exchange rate movements.

scholarly journals The “day-of-the-week” effects in the exchange rate of Latin American currencies

2019 ◽  
Vol 14 (PNEA) ◽  
pp. 485-507
Author(s):  
Roberto Joaquín Santillán Salgado ◽  
Alejandro Fonseca Ramírez ◽  
Luis Nelson Romero
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Latin American ◽  
Foreign Exchange Market ◽  
The United States ◽  
Management Decision ◽  
Exchange Market ◽  
Day Of The Week ◽  
The Exchange Rate

This paper examines the “day-of-the-week” anomaly in the foreign exchange market of six major Latin American countries’ currencies: (Argentina, Brazil, Chile, Colombia, Mexico, and Peru), all with respect to the United States’ dollar. The returns of daily exchange rates are stationary, so we use linear regressions combined with GARCH, TARCH and EGARCH models to explore the presence of the “day-of-the-week” anomaly. The results confirm the presence of “abnormal” effects in some of the currencies and in some days of the week, particularly on Fridays and Mondays. Moreover, volatility in exchange rates shows clustering behavior, as well as leverage effects, which are carefully modelled in our analysis. This paper contributes to the literature by studying the “day-of-the-week” effects in currency exchange rate markets, a clear innovation with respect to the typical stock market analysis. The results reported are useful for foreign exchange market traders, currency exposure management decision makers, monetary authorities, and financial policy designers in the countries included in the study. Indeed, the results suggest the presence of a typical behavior of the exchange rate of all the currencies included in the sample.

scholarly journals EXCHANGE RATE - REGIMES AND POLICIES

2014 ◽  
Vol 1 (9) ◽  
pp. 97
Author(s):  
Novak Lučić
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Supply And Demand ◽  
Balance Of Payments ◽  
Direct Impact ◽  
Exchange Market ◽  
Equilibrium Exchange Rate ◽  
Equilibrium Exchange ◽  
Rate Policy

Exchange rate of one currency is theprice of the currency expressed in units of othercurrency. It is formed by the interaction of supply anddemand in the foreign exchange market. Given thatthe exchange rate has a direct impact on thecompetitiveness of a country in terms of features of itsexports and imports, in its balance of payments, andindirectly the overall economic and socialdevelopment, in addition to acting in marketprinciples - supply and demand in the formation ofthe equilibrium exchange rate, exchange rate issubject to different, stronger or weaker, more or less,forms of intervention. In the search for the optimalexchange rate policy of the national currency, themonetary authorities are positioned between the twoextremes - the complete abandonment of theexchange rate to the market laws of supply anddemand, or fixing the exchange rate for any of theselected anchor currency.

The Effectiveness of Fed Intervention on the USD/DM Foreign Exchange Market

2006 ◽  
Vol 6 (2) ◽  
pp. 1850088 ◽  
Author(s):  
Zhaodan Huang ◽  
Stephen Neun
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Policy Option ◽  
Exchange Market ◽  
Event Window ◽  
Study Approach ◽  
Exchange Rate Movements ◽  
The Exchange Rate ◽  
Exchange Rate Level

This study empirically examines the effectiveness of Fed intervention on the USD/DM exchange market using an event study approach. The event window is defined as 4 (8) days prior/post an intervention. Based on the empirical analysis, the results show that when the Fed follows an "against the wind" policy, exchange rate movements are smoothed and may switch direction. The results are robust and hold for different event window definitions and sample ranges. To test whether the results are due to the exchange rate movement itself, we conduct a simple test using customer trades by the Fed. The results do not exhibit a systematic pattern. We also find that a joint intervention has a stronger impact on the exchange rate level when the Fed buys US dollars. The policy implication of our findings is that intervention in foreign exchange markets on the part of the Fed to impact the value of the US dollar is a viable policy option.

scholarly journals REGULATORS AND LEVERS OF THE ANTI-CRISIS POLICY OF STATE IN THE FIELD OF MONETARY AND ECONOMIC RELATIONS

2021 ◽  
Author(s):  
Tetiana Kosova ◽  
Olga Tereshchenko
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Currency Crises ◽  
Foreign Exchange Market ◽  
Currency Crisis ◽  
Balance Of Payments ◽  
National Currency ◽  
Exchange Market ◽  
The Third ◽  
Positive Balance

In the article the definition of the currency crisis as a sharp violation of exchange parity, devaluation of the national currency of a country, the single currency of the economic union, the world reserve currency, etc. for a short period after a period of relatively long exchange rate stability. It is established that the source of the currency crisis can be the banking system, the budget sphere, domestic and foreign public debt, balance of payments, and the channels of influence of factors can be isolated or combined (double, triple, etc.). The main goal of anti-crisis policy in the field of monetary and financial relations is early warning of the crisis. It is shown that the choice of regulators and levers should depend on the model of crisis phenomena in the foreign exchange market, the diversity of which is reduced to the dominance of certain factors: economic, non-economic (military-political, behavioral, psychological), external influence. The retrospectives of four currency crises that have taken place since Ukraine's independence have been assessed, their models have been diagnosed: 1992-1993 – the first, 1998-1999 – mixed (synthesis of the first and third models), 2008-2009 – the third, 2014-2015 – the second. It is statistically shown that the first crisis was the most acute, the third crisis was the mildest. Regulators and levers of anti-crisis policy are defined as a system of interconnected mechanisms of state and market regulation aimed at ensuring the stability of the national currency, its external and internal convertibility, positive balance of payments, growth of official foreign exchange reserves, stimulating the country's export potential. It is proved that the anti-crisis policy of the state in the field of monetary and financial relations should strengthen and complement the operation of market mechanisms with priority given to economic regulators and levers over administrative ones. The main objects of the anti-crisis mechanism in the foreign exchange market, which are implemented in the real and financial sectors of the national economy and are designed to eliminate currency and macroeconomic imbalances, the balance of payments, harmonize monetary and exchange rate policies of the NBU.

scholarly journals Triangular Causality and Controlling Parallel Exchange Market

2019 ◽  
Vol 3 (1) ◽  
pp. 20-32
Author(s):  
Bijan Bidabad
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Price Level ◽  
Balance Of Payments ◽  
Market Liquidity ◽  
Exchange Market ◽  
Long Run ◽  
Short Run ◽  
The Exchange Rate ◽  
The Relationship

In this paper, the triangular relationship of money, price, and foreign exchange in a causality context are studied. It is concluded that regulating the exchange rate by volume of liquidity in a period of less than a year is not possible, but in annual and biannual analyses we can regulate the exchange rate through controlling the liquidity. In other words, in the long run, the exchange rate is affected by liquidity and price level, but in the short run, the price level has only temporary effects on the exchange rate. The results of the study show that: liquidity affects the exchange rate in the long run; price affects the liquidity in the long run; in the long run, liquidity and exchange rate affect prices.  Our results show that injection of foreign exchange into the parallel exchange market with different lags has little effects with different directions on the exchange rate. The same result is true for the relationship between liquidity and dollar rate. In other words, in spite of the long run relationship between exchange rate and liquidity, we cannot justify this relationship in the short run. The same is true with the balance of payments position and exchange rate in the short run. By simulating the relationship between injecting (selling) foreign exchange in the parallel exchange market, liquidity and the cumulative balance of payments all with exchange rate, we can conclude that in the short run, regulating exchange rate by instruments such as selling exchange in the parallel market or controlling the liquidity is not possible, but in the long run, conducting foreign exchange sale policy and controlling the liquidity and the balance of payments position can control the exchange market.

scholarly journals How could we observe change of the exchange rate? Review of selected factors of influence on foreign exchange market

Revizor ◽  
2020 ◽  
Vol 23 (91-92) ◽  
pp. 77-85
Author(s):  
Milorad Stamenović ◽  
Sanja Jelisavac-Trošić
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Risk Exposure ◽  
Exchange Market ◽  
Management Measures ◽  
Factors Of Influence ◽  
The Exchange Rate ◽  
The Impact ◽  
Significant Factors

This paper defines the participants in the international foreign exchange market and the influence of natural, political, and economic factors on the movement of the exchange rate, and analysis of circumstances that may contribute to the change of the exchange rate. The paper aims to present the analysis of the exchange rate through macroeconomic phenomena and define the factors influencing the change in the exchange rate and the impact on the work of participants in that process. As risk management measures can prevent the influence of significant factors defined in the paper, measures, and types of risk exposure are determined.

scholarly journals Foreign exchange market interventions and the $–¥ exchange rate in the long run

2015 ◽  
Vol 47 (38) ◽  
pp. 4037-4055
Author(s):  
Joscha Beckmann ◽  
Ansgar Belke ◽  
Michael Kühl
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
Long Run ◽  
The Exchange Rate

scholarly journals Foreign Exchange Market Intervention and Exchange Rate Stability: An Empirical Anayisis for Nigeria

2021 ◽  
pp. 34-45
Author(s):  
E. Adedeji Kayode ◽  
O. Apinran Martins ◽  
I. Awoniyi Bisola
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Series Data ◽  
Exchange Market ◽  
Market Intervention ◽  
The Exchange Rate ◽  
The Impact ◽  
Foreign Exchange Market Intervention ◽  
Exchange Market Intervention

The essential roles played by exchange rate on general macroeconomic stability has attracted the Central Bank of Nigeria (CBN) to intervene in the foreign exchange market, in order to smoothen exchange rate volatility, among other goals. The study to examine the impact of foreign exchange market intervention on stability of exchange rate in Nigeria with a monthly time series data from 2000M1 to 2020M12. The research employs the use of Autoregressive Distributive Lag approach (ARDL) of analysis. The result indicates that the currency interventions policy of the CBN in Nigeria is effective and exerts significant impact on the exchange rate stability of Naira in both in the short and long-run within the period under investigation. We, therefor, recommend that the monetary authority should continue to employ the usage of stock of foreign reserves in supporting the exchange rate by increasing funding of the operations in foreign exchange market.

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