What Factors Affect the RMB Carry Trade Return for Sustainability? An Empirical Analysis by Using an ARDL Model

With the internationalization of RMB and the openness of China’s capital account, the amount of foreign institutions investing in China has increased significantly. Based on China’s daily data from January 2007 to September 2021, this study investigated the factors that affect the RMB carry-trade return for sustainability. By comparing the results of the carry return before and after the foreign-exchange reform on 11 August 2015, this study found that the RMB carry return has become more traceable after the exchange-rate reform. Meanwhile, the model fitting degree of explaining the RMB carry return was higher, and there were fewer missing variables. Therefore, this study found that after the RMB-exchange-rate mechanism became more market oriented, the RMB carry return became more reasonable, and the carry trade can play a better role in foreign-exchange pricing. Meanwhile, after using the RMB non-deliverable forwards (NDF) to construct a carry-trade position to perform the robustness test, such results were consistent. With different results before and after the exchange-rate reform, this study can provide references for policy makers and investors for sustainable development.

Carry Trade, Exchange Rates, and the Balance-of-Payments

This paper presents a partial equilibrium model that integrates interest rate arbitrage with the balance-of-payments constraint to determine the real exchange rate. The sequential logic is the following: (i) carry-trade determines the term premium, with the spot rate showing greater volatility than the forward rate, (ii) uncovered interest rate parity determines the spot rate based on the real exchange rate consistent with a financial constraint, defined as a stable ratio of foreign reserves to foreign debt; and (iii) the trade balance consistent with the financial constraint determines the long-run real exchange rate for a given ratio of domestic to foreign income.

The Relationship between Carry Trade and Asset Markets in South Africa

This paper investigates the extent of volatility or risk spillovers between the currency carry trade and asset markets, namely the equity and bond markets, in South Africa to infer the extent of the connectivity between the two markets. The carry trade operation examined in this paper involves two strategies, both of which use the South African rand as the investment currency, with the U.S. dollar and the Japanese yen as the funding currencies. The vector autoregressive BEKK-Generalised Autoregressive Conditional Heteroscedastic (multivariate VAR-BEKK-GARCH) model is used to this end. Moreover, the paper assesses the dynamic correlation between each currency carry trade and asset markets to infer the time-varying dependence between the two markets. The results of the empirical analysis show evidence of volatility spillover between the carry trade returns and the two asset market returns. The extent of the spillover depends on the choice of the funding currency, with the U.S. dollar-funded strategy transmitting more shocks to the South African equity market compared to the bond market. Moreover, the synchronisation of the dynamic correlation between each asset market and the currency carry trade returns shows that any possibility of arbitrage is precluded in the currency carry trade market.

Diagnóstico de Clima Organizacional e Proposições de Endomarketing para Comércio Atacadista: um Relato Técnico

Resumo Este estudo teve por objetivo discutir uma proposta para a utilização de ferramentas de endomarketing, visando a melhoria do clima organizacional de uma organização. O primeiro objetivo se marca pela avaliação do clima organizacional da empresa. O clima na organização permite colher percepções dos colaboradores sobre apoio da chefia/organização, recompensa, conforto físico, controle/pressão e coesão entre Colegas, além de possuir correlação positiva com resultados organizacionais. O segundo objetivo é propositivo, e visa o uso racional das estratégias de endomarketing para preencher lacunas encontradas por esta avaliação. Entende-se como endomarketing as estratégias para promover os sentimentos que os colaboradores têm da qualidade dos serviços prestados e produtos da organização e da importância de seus papéis nesta produção, tornando-os chaves no processo de atendimento das necessidades dos clientes. O estudo e as propostas foram feitas em um comércio do tipo atacarejo na cidade de Corumbá/MS. Os dados foram coletados na perspectiva da pesquisa mista, utilizando a Escala de Clima Organizacional de Martins (2008) e entrevista semiestruturada junto aos gestores. Os resultados mostraram um clima organizacional satisfatório e apontam para a combinação positiva das duas vertentes, no âmbito dos estudos em gestão de pessoas, promovendo benefícios para empresa, empregador, e conexão dos colaboradores com os objetivos estratégicos da organização. Palavras-chave: Endomarketing. Clima Organizacional. Atacadista. Varejo. Abstract This study aimed to discuss a proposal to use internal marketing tools to improve organizational climate. The first objective is marked by the assessment of the company's organizational climate. The organizational climate allows us to gather perceptions from employees about support from the management / organization, reward, physical comfort, control / pressure and cohesion among colleagues, in addition to having a positive correlation with organizational results. The second objective is propositional, and aims at the rational use of internal marketing strategies to fill in the gaps found by this assessment. Endomarketing is understood as the strategies to promote the feelings that employees have of the quality of the services provided and products of the organization and the importance of their roles in this production, making them key in the process of meeting the customers needs. The study and proposals were made in a cash-and-carry trade in the city of Corumbá/Brazil. The data were collected from the perspective of the mixed survey, using Organizational Climate Scale (MARTINS, 2008) and a semi-structured interview with the managers. The results showed a satisfactory organizational climate and point to a positive combination of the two aspects in the scope of people management studies, promoting benefits for the company, employer, and connecting employees with the organization's strategic objectives. Keywords: Internal Marketing. Organizational Climate. Wholesaler. Retail.

Capital Controls, Domestic Macroprudential Policy and the Bank Lending Channel of Monetary Policy

We study how capital controls and domestic macroprudential policy tame credit supply booms, respectively targeting foreign and domestic bank debt. For identification, we exploit the simultaneous introduction of capital controls on foreign exchange (FX) debt inflows and an increase of reserve requirements on domestic bank deposits in Colombia during a strong credit boom, as well as credit registry and bank balance sheet data. Our results suggest that first, an increase in the local monetary policy rate, raising the interest rate spread with the United States, allows more FX-indebted banks to carry trade cheap FX funds with more expensive peso lending, especially toward riskier, opaque firms. Capital controls tax FX debt and break the carry trade. Second, the increase in reserve requirements on domestic deposits directly reduces credit supply, and more so for riskier, opaque firms, rather than enhances the transmission of monetary rates on credit supply. Importantly, different banks finance credit in the boom with either domestic or foreign (FX) financing. Hence, capital controls and domestic macroprudential policy complementarily mitigate the boom and the associated risk-taking through two distinct channels