Corporate Cash Holdings and National Culture: Evidence from the Middle East and North Africa Region

This paper investigates to what extent cultural dimensions, based on Hofstede’s model, can clarify differences in cash holding levels. The sample includes 395 banks across 19 countries in the Middle East and North Africa region over a period of 16 years (1999–2014). The findings indicate that when uncertainty avoidance and masculinity decrease, cash holdings increase, whereas when power distance, long-term orientation, and individualism increase, the cash holdings increase correspondingly. Based on robustness analysis, the results remain unaffected even after controlling corporate and macroeconomic characteristics related to inflation, corruption, and the exchange rate system. Further analysis shows insignificant differences between Islamic and non-Islamic banks regarding the influence of culture over cash holdings. This study contributes to the literature regarding the impact of culture on corporate cash holdings based on a unique and different context, through examining this relationship in financial institutions located in the Middle East and North Africa region.

The development of exchange rate systems in Central Asia- history and current policy initiatives

The article discusses the topic of history of exchange rate system development in Central Asian countries including Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan along with central banks’ current policy initiatives. Report includes the analysis of the IMF reports regarding the above mentioned countries and some extra literature referring to the topic.

عائد الإصدار النقدي في ظل نظام سعر الصرف المرن في العراق للمدة (1990-2003)

This study deals with the relationship between the flexible exchange rate system and the return on the monetary issue, in other words, it tries to clarify the extent of the impact of adopting the flexible exchange rate system on the monetary return that the government can get. Therefore, this study came divided into three sections, the first topic dealt with the concept of the flexible exchange rate, while the second topic dealt with the concept of the return on the cash issue and methods of measuring it, and the third section reviews the size of the return on the cash issue achieved by the government if it follows the flexible exchange rate system. Keywords: yield on the cash issue, flexible exchange rate system, inflation tax, opportunity cost.

Exchange Rate and Industry-Level Energy Import

After the Bretton Woods exchange rate system in 1973, the free-floating exchange rate, the rate determined by the forces of supply and demand, began, which developed an interest in the area of many researchers to investigate, theoretically and empirically, the impact of exchange rate volatility on the world trade flows. There are two channels, direct and indirect, through which the change in exchange rate affects domestic prices. Under the direct channel, a fall in exchange rate leads to increase in imports as well as increases the prices of inputs in domestic currency. Secondly, under the indirect channel, a decline in the exchange rate triggers the availability of domestic goods to foreign buyers at a cheaper rate, and the demand for domestic products increased. Thus, the change in exchange rate affects trade flows either positively or negatively.

Analysis on the Impact of the Foreign Exchange Reserves of China on Its Macro Economy

China has the largest foreign exchange reserve in the world, but the high foreign exchange reserve is a double-edged sword for the country. There are two kinds of analysis for this. First, China's foreign exchange reserves have far exceeded the reasonable scale, which will cause China to pay extremely high management costs. Second, China's foreign exchange reserves are considerable, but this is the objective demand of the economy. Sufficient foreign exchange reserves can make China occupy a favorable position in international development. Based on the data on China's foreign exchange reserve, foreign debt scale and GDP from 1985 to 2019, this paper analyzes the positive and negative effects of high foreign exchange reserve on China's economic development. By analyzing the current situation of China's foreign exchange, the author gives some policy suggestions: (1) appropriately reduce foreign exchange reserves; (2) promote the reform of the exchange rate system; (3) reform the foreign exchange system

The BSP’s journey towards a progressive monetary policy framework

This paper examines the evolution of monetary policy framework in the country. It starts the journey with the establishment of the central bank after the Second World War, when there was still no active monetary policy as the country operated on a fixed exchange rate system and supply-led credit programs. The paper describes the challenges with the implementation of monetary policy reforms in the 1980s, particularly the shift to a “managed float” exchange rate system and the adoption of monetary aggregate targeting framework in the context of deregulation and liberalization. It further discusses the development of monetary policy framework and operations, following the creation of an independent Bangko Sentral ng Pilipinas (BSP) in 1993, with the primary mandate of maintaining price stability. It provides a narrative on how the monetary aggregate targeting framework was modified to its eventual shift to an inflation targeting (IT) framework. It highlights the relative success of IT and discusses the innovative approaches undertaken by the BSP to further enhance liquidity management. Moving forward, the BSP’s monetary policy framework and operations will likely continue evolving and serving as steady anchors of macroeconomic stabilization. This will be guided by foresight, commitment to action and helpful lessons from the past, in the context of increased uncertainty.

Empirical Research on the Influence of International Crude Oil price fluctuation on Russian Exchange Rate

Oil is a kind of basic energy and has close relationship with the financial markets. Russia is the world crude oil exporter, whose rich energy resources make the country tend to invest in energy industry and make policies for it. This has led to the fact that its national economic structure is too simplified and its economy is heavily dependent on the oil industry. The total oil exports for Russia each year account for up to forty percent of its fiscal revenues. The economic characteristics of Russia and the fluctuation of international crude oil price greatly influence the macroeconomic changes of a country and therefore the exchange rate will make a change too. So this paper, will explore the relationship between the international oil price and Russian exchange rate and the degree of the influence between each other. The paper will select international crude oil price as exogenous variables and take the Russian currency as endogenous variables to establish VAR model. In view of the conclusion, this paper points out the drawbacks of Russia's current economic development, and finally puts forward reasonable and effective suggestions from the aspects of exchange rate system and economic structure.

Openness-inflation Nexus in alternative monetary regimes

By applying an endogenous switching regression model to a sample of 64 countries, this article explores whether the effect of trade openness on inflation is influenced by the adoption of inflation targeting (IT). The outcome indicates that, while there exists a significant and negative impact of trade openness on inflation in the non-IT countries with flexible exchange rate system, the effect is negligible in the IT economies. In addition, the above differential inflation effect of trade openness across IT and non-IT regimes is only present in the developing subsample with flexible exchange rate system, but not the developed counterpart. Moreover, apart from trade openness, financial openness reinforces inflation in those developing countries not adopting IT, whereas no such significant effect is found in developing countries adopting IT. Instead of inflation, further results show that trade openness lowers inflation volatility both in developing and developed countries not adopting IT, yet the impact is smaller in developed country group. However, no such statistically significant link is found in developing and developed countries that adopt IT.

Relationship between Exchange Rate and Reserves in EAEU Countries

The Eurasian Economic Union, which was officially established five years ago, faced many financial and economic problems in this period. After 2014, when sanctions against Russia began, all members’ national currency suffered serious depreciation and central banks had to actively intervene in the foreign exchange market. In fact, Russia and Kazakhstan have changed regime and switched from the fixed to the flexible exchange rate system. Since the foreign exchange market has been more stable in recent years, central banks are trying to complete the reserves that had been lost that period. Therefore, with the change of foreign reserves, money supply is also changing. The aim of this study is to examine and compare the relationship between exchange rates, reserves and money supply in five EAEU countries. Quarterly data for the period 2010-2019 was used to achieve the goal. Toda-Yamamoto causality and ARDL cointegration approach were used as a method. It was concluded that more coordinated execution of monetary and exchange rate policies would be in favor of all members. However, the basic principle should be that all members benefit equally from the cooperation.