scholarly journals The Effects of Exchange Rate Volatility on Exports in COMESA: A Panel Gravity Model Approach

2020 ◽  
Author(s):  
Lucas Njoroge
Keyword(s):  
Exchange Rate ◽  
Gravity Model ◽  
Exchange Rate Volatility ◽  
Policy Makers ◽  
Random Effects Models ◽  
Foreign Reserve ◽  
Exchange Rate Fluctuations ◽  
Alternative Measures ◽  
Trade Potential ◽  
Underlying Causes

In the recent past, exchange rate volatility has become a matter of concern for developing and emerging economies partly due to monetary policy actions of advanced economies and partly due to domestic policy actions. This study examines the effects of exchange rate volatility on exports, using a panel gravity model covering the period 1997 to 2019, to estimate pooled, fixed and random effects models for a panel of 19 COMESA member countries. Applying two alternative measures of exchange rate volatility, empirical results reveal that exchange rate volatility tends to depress both intra and extra-COMESA trade. The results suggest that policy makers in COMESA should not ignore exchange rate volatility when designing trade policies and strategies in member countries. Monetary authorities should strive to stabilize exchange rates by addressing the underlying causes of large, unpredictable and damaging exchange rate fluctuations while cautiously avoiding either further destabilizing the exchange rate or depleting foreign reserve buffers that could result in vulnerability to external shocks. It is also important to develop regional infrastructure like roads, railways and ports to further integrate the region and hence unlock the trade potential for COMESA region.

scholarly journals Investigating External Debt and Exchange Rate Fluctuations in Nigeria: Any Difference with ARDL Model?

2020 ◽  
Vol 65 (3) ◽  
pp. 53-64
Author(s):  
Timothy Ayomitunde Aderemi ◽  
Lawrence Olusegun Fagbola ◽  
Gbenro Matthew Sokunbi ◽  
Chidinma Edith Ebere
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange Market ◽  
Positive Impact ◽  
External Debt ◽  
Policy Makers ◽  
Promotion Policy ◽  
Foreign Reserve ◽  
Exchange Rate Fluctuations ◽  
Short Run ◽  
Lag Model

AbstractOne of the contending issues in Nigeria in the recent time is external debt and exchange rate fluctuations. In view of the above, this study examined the relationship between external debt and exchange rate fluctuations in Nigeria over the period of 1981 to 2018. Consequently, the study employed Autoregressive Distribution Lag Model to address the objective of the study. The major findings that originated in this paper are as follows: external debt, debt service payment and foreign reserve have a significant positive impact on exchange rate fluctuations in the short run in Nigeria. Furthermore, based on these findings, recommendations are made for the policy makers that external debt as a means of financing budget deficit should be minimized if not totally discouraged in Nigeria because its servicing in particular and repayment put pressure on foreign exchange market in the short run and thereby leads to exchange rate fluctuations in terms of depreciation of naira in the country. Also, country’s foreign reserve should be strengthened through the implementation of aggressive export promotion policy in Nigeria.

scholarly journals Exchange Rate Fluctuations & Economy of Pakistan, Time series Analysis (1989-2013)

2020 ◽  
Vol 8 (16) ◽  
pp. 474-489
Author(s):  
Muhammad Salih Memon ◽  
Raheem Bux Soomro ◽  
Sajid Hussain Mirani ◽  
Mansoor Ahmed Soomro
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Linear Regression ◽  
External Debt ◽  
Economic Policies ◽  
Economic Stability ◽  
Policy Makers ◽  
Independent Variables ◽  
Exchange Rate Fluctuations ◽  
Ministry Of Finance

Economic stability is remained on topmost priority of every country, and different measures were suggested by the researchers worldwide, by moving on the same track study was carried out to predict the currency valuation factors, data were collected from export promotion bureau, state bank of Pakistan, and ministry of finance for 25 years (1989-2013), by using linear regression; currency valuation as dependent variable, exports, changes in external debt, and total reserves as independent variables and concluded that only the exports of Pakistan is a right predictor of currency valuation of the country which policy makers must have incorporate in formation of economic policies and setting the targets before fiscal policy. 

scholarly journals Domestic Ban Versus Border Rejections: A Case of Oman’s Fish Exports to the EU

SAGE Open ◽  
2019 ◽  
Vol 9 (1) ◽  
pp. 215824401882307 ◽  
Author(s):  
Shekar Bose ◽  
Amina Marhoon Rashid Al Naabi ◽  
Houcine Boughanmi ◽  
Jaynab Begum Yousuf
Keyword(s):  
Exchange Rate ◽  
Structural Changes ◽  
Supply And Demand ◽  
The European Union ◽  
Related Factors ◽  
Policy Makers ◽  
Relative Significance ◽  
Exchange Rate Fluctuations ◽  
Adaptive Policy ◽  
The Eu

The decline of Oman’s fish exports to the European Union (EU) since mid-2000s has caused legitimate concerns among policy makers and exporters. However, the potential reasons for the decline have not been fully elucidated. To ascertain the underlying causes of such decline, this article empirically examines the relative significance of potential economic and policy-related factors such as border rejections influenced by health and safety measures, supply and demand capacities, domestic ban, domestic structural changes, and exchange rate fluctuations on Oman’s fish exports to the EU. The results obtained from the dynamic unbalanced panel data model for the period 2000-2013 indicate that fish exports to the EU markets have been influenced by the domestic ban on export, domestic structural changes, and exchange rate fluctuations rather than by border rejections. These findings provide important signal to policy makers of the respective countries in designing adaptive policy approach to address such influences.

scholarly journals PENGARUH VOLATILITAS NILAI TUKAR TERHADAP KINERJA EKSPOR UTAMA PERTANIAN INDONESIA

2019 ◽  
Vol 13 (2) ◽  
pp. 163-186
Author(s):  
Eka Dewi Satriana ◽  
Harianto ◽  
Dominicus Savio Priyarsono
Keyword(s):  
Exchange Rate ◽  
Natural Rubber ◽  
Gravity Model ◽  
Palm Oil ◽  
Exchange Rate Volatility ◽  
Garch Model ◽  
Trading Partner ◽  
Easy Access ◽  
Crude Palm Oil ◽  
Agricultural Exports

Abstrak Nilai tukar merupakan salah satu aspek yang memengaruhi daya saing ekspor. Pada tahun 2013 hingga tahun 2015, volatilitas nilai tukar mengalami kenaikan, khususnya pada triwulan akhir tahun 2015 yaitu sebesar 16,90%. Kondisi ekspor utama pertanian Indonesia pada tahun tersebut rata-rata mengalami penurunan. Penelitian ini bertujuan untuk menganalisis pengaruh volatilitas nilai tukar terhadap kinerja ekspor utama pertanian Indonesia ke negara mitra dagang utama dengan menggunakan gravity model. Ekspor utama pertanian yang dianalisis yaitu karet alam, kopi, udang, dan Crude Palm Oil (CPO). Model ARCH-GARCH digunakan untuk mengukur volatilitas nilai tukar. Hasil analisis menunjukkan bahwa volatilitas nilai tukar berpengaruh negatif terhadap ekspor karet alam, kopi, dan udang Indonesia. Artinya, semakin fluktuatif nilai tukar rupiah maka akan menurunkan ekspor karet alam, kopi, dan udang Indonesia ke negara mitra dagang utama. Pengaruh negatif tersebut juga menunjukkan adanya penghindaran risiko yang dilakukan oleh pelaku usaha. Beberapa rekomendasi hasil kajian yang dapat dilakukan Pemerintah Indonesia adalah menjaga stabilitas nilai tukar, kemudahan akses ke lembaga keuangan, penerapan lindung nilai (hedging), kontrak jangka panjang (longterm contracts), dan menjaga pertumbuhan produksi komoditas. Kata Kunci: Volatilitas Nilai Tukar, Ekspor Utama Pertanian, Model ARCH-GARCH   Abstract The exchange rate is one aspect that affects export competitiveness. From 2013 to 2015, exchange rate volatility increased, especially in the final quarter of 2015, which was 16.90%. Indonesia's main agricultural export conditions in the year on average experienced a decline. This paper analyzes the effect of exchange rate volatility on the performance of Indonesia's main agricultural exports to major trading partner countries using the gravity model. The main agricultural exports analyzed were natural rubber, coffee, shrimp, and Crude Palm Oil (CPO). The ARCH-GARCH model is used to measure exchange rate volatility. The analysis shows that exchange rate volatility harms on Indonesia's exports of natural rubber, coffee, and shrimp. This means, the more the rupiah exchange rate fluctuates will reduce Indonesia's natural rubber, coffee and shrimp exports to the main trading partner countries. The negative influence also indicates the existence of risk aversion by business actors. Some recommendations for the Government of Indonesia based on the study findings are maintaining exchange rate stability, easy access to financial institutions, implementing hedging, long-term contracts, and maintaining commodity production growth. Keywords: Exchange Rate Volatility, Main Agricultural Exports, ARCH-GARCH Model JEL Classification: F14, F31, F41, Q17

scholarly journals Effect of Exchange Rate Volatility on Exports in Nigeria: A Test of Cochrane-Orcutt Technique

2015 ◽  
Vol 3 (12) ◽  
pp. 684-696
Author(s):  
Bello Malam Sa’idu
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Private Investment ◽  
Least Square ◽  
Dynamic Effects ◽  
Relative Prices ◽  
Exchange Rate Fluctuations ◽  
Processed Form

This paper examines the dynamic effects of exchange rate fluctuations on exports in Nigeria. To achieve the set objectives, classical least square and Cochrane-Orcutt technique were applied. Results revealed that exchange rate volatility and foreign income have positive and significant effect on exports, while relative prices exert negative and significant effect on exports. This implies that, a unit rise in exchange rate volatility and foreign income, coincidentally both lead to increase in exports by eightfold. Consequently, government should strengthen the Naira to minor spirals, attract foreign income flow, and promote export goods, among others. Foreign income flow could be attracted via private investment of export goods, transforming them to semi-processed form thereby improving exports prices, values and volume in the country.

scholarly journals PENGARUH VOLATILITAS NILAI TUKAR TERHADAP VOLATILITAS INDEKS SEKTOR PERTAMBANGAN SAHAM SYARIAH INDONESIA

2020 ◽  
Vol 7 (9) ◽  
pp. 1743
Author(s):  
Nanda Lismatiara Zubaid ◽  
Sulistya Rusgianto
Keyword(s):  
Exchange Rate ◽  
Stock Price ◽  
Exchange Rate Volatility ◽  
Sampling Technique ◽  
Mining Sector ◽  
Purposive Sampling ◽  
Exchange Rate Fluctuations ◽  
Egarch Model ◽  
Exchange Rate Movements ◽  
The Government

ABSTRAKVolatilitas merupakan refleksi besarnya risiko dari naik turunnya harga saham atau valuta asing. Penelitian ini bertujuan untuk menganalisis pengaruh volatilitas nilai tukar terhadap volatilitas indeks sektor pertambangan saham syariah Indonesia. Pengambilan sampel 10 emiten dilakukan dengan teknik purposive sampling selama periode penelitian 12 Mei 2011 hingga 31 Desember 2019. Metode yang digunakan adalah model EGARCH. Volatilitas nilai tukar ditemukan berpengaruh signifikan terhadap sektor pertambangan saham syariah. Hasil dari penelitian ini memberi bukti empiris dalam memprediksi pergerakan nilai tukar dan indeks sektor pertambangan, serta  dapat menjadi sumber informasi bagi pemerintah untuk mempertimbangkan kebijakan insentif terhadap emiten di sektor pertambangan yang sensitif akibat fluktuasi nilai tukar, dan informasi bagi investor dalam mempertimbangan investasi di sektor pertambangan.Kata Kunci: Volatilitas, Nilai Tukar, Indeks Sektor Pertambangan Saham Syariah ABSTRACTVolatility is a reflection of risk from the increase and decrease of stock price or exchange rate. This study aims to analyze the effect of exchange rate volatility on Indonesia’s sharia stock mining sector index. Sample from 10 companies was obtained by using a purposive sampling technique with an observation period from 12 May 2011 until 31 December 2019. The method used in this study is the EGARCH model. This study shows that exchange rate volatility has a significant effect on the sharia stock mining index. The results of this study provide empirical evidence in predicting exchange rate movements and mining sector index and can be a source of information for the government to consider incentive policies for issuers in the mining sector that are sensitive due to exchange rate fluctuations, and information for investors in considering mining sector investments.Keywords: Volatility, Exchange Rate, Sharia Stock Mining Sector Index

scholarly journals Coping with the Exceptional Economic Problems in Turkey: A Field Survey on SMES

2019 ◽  
Vol 12 (2) ◽  
pp. 109-126 ◽  
Author(s):  
Ercan Özen
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Developed Countries ◽  
Business Owners ◽  
Important Place ◽  
Exchange Rate Fluctuations ◽  
The Exchange Rate ◽  
The Impact

Abstract Developing countries need higher economic growth to reach the level of developed countries. When developing countries exceed the potential economic growth, problems, such as, high external debt and high current deficit emerge. Such situations increase the financial risk of the country; in addition, international political risks, fluctuations in capital inflows and some manipulative movements have subjected countries to extreme exchange rate fluctuations. Purposes of this research: (1) to uncover the impact of high exchange rate volatility on small business activities and (2) to determine whether the level of exposure of the exchange rate shock on business owners varies by age. The methodology of the study involved a survey administered to 390 small and medium-sized enterprises (SMEs). The findings of the study show that after a period of significant exchange rate fluctuations, business activities were negatively affected, sales decreased, and job cuts increased. On the other hand, the exchange rate effect was mostly felt by all business owners of different ages. According to the study, it can be concluded that small enterprises are vulnerable to rising exchange rate volatility. The effect on SMEs with more work experience is not different. In order to alleviate the effects of adverse exchange rate movements, enterprises should be more cautious in their activities. Two suggestions can be made at this point: (i) Governments should follow optimal growth policies and (ii) Small businesses that have an important place in the economy should be made aware of the exchange rate risk and crisis management.

scholarly journals Asymmetric Exchange Rate Pass-Through in Southeast Asian Rice Trade

2021 ◽  
pp. 1-34
Author(s):  
Taylor Wiseman ◽  
Jeff Luckstead ◽  
Alvaro Durand-Morat
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
The Philippines ◽  
Distributed Lag ◽  
Asian Rice ◽  
Exchange Rate Fluctuations ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The Impact ◽  
Rice Trade

Abstract Asian countries consume approximately 90% of the world’s rice supply. Between 2007 and 2014, Thailand, Vietnam, and India accounted for 60% of the world’s exports of rice. A nonlinear autoregressive distributed lag (NARDL) econometric model is utilized to estimate the impact of exchange rate fluctuations on rice trade in Southeast Asia. Focusing on the largest importing countries and exporting country by volume, the analysis considers Malaysian, Indonesian, the Philippines, and Chinese rice imports from Thailand. Results show that importing countries’ state trading enterprises (STEs) generally do not follow profit-maximizing behavior in reacting to exchange rate volatility.

scholarly journals Effect of exchange rate uncertainty on bilateral trade performance in SAARC countries: a gravity model analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Banna Banik ◽  
Chandan Kumar Roy
Keyword(s):  
Exchange Rate ◽  
Panel Data ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Exchange Rate Volatility ◽  
Exchange Rate Uncertainty ◽  
Content Type ◽  
Estimation Techniques ◽  
Trade Performance ◽  
The Impact

PurposeExchange rate uncertainty leads to an indecisive environment for imports and exports that would condense international trade, foreign direct investment, trade earnings, trade volumes, economic growth and welfare. This study aims to examine, empirically, the effect of exchange rate uncertainty on bilateral trade performance, focusing on eight SAARC member economies using the popular modified gravity model of trade.Design/methodology/approachThe paper includes eight SAARC members – Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka panel data set over the period 2005–2018. The authors consider both standardized value (standard deviation) and conditional variance model to determine volatility of exchange rate. Primarily, ordinary least squares, random effects and fixed effects estimation techniques are employed to investigate the impact of exchange rate volatility. Endogeneity and robustness of the findings have been tested using the simultaneity-adjusted model and dynamic panel data two-step system GMM estimation techniques.FindingsEmpirical findings endorse the view that exchange rate volatility lowers trade flows in the SAARC regions. However, this adverse effect of exchange rate uncertainty on trade is pretty small. The negative correlation between exchange rate volatility and bilateral trade remains consistent and significant after controlling of simultaneous causality, autocorrelation, year effects, country-pair heterogeneity and endogeneity irrespective of panel data estimation techniques and different measures of volatility.Originality/valueThe present paper is original work.

Sign in / Sign up

Export Citation Format

Share Document