External Debt and its Impact on Exchange Rates in the Philippines

The exchange rate is a crucial macroeconomic factor within emerging and transition economies. External debt is a driving force for the growth of an economy. This study then aims to determine the impact of external debt on the exchange rate of the Philippines by examining the impact of external debt accumulation on the Philippines' exchange rates. The researcher applies a correlational time series analysis in order to capture the impact of external debt, debt services on external debt, and foreign reserves on the exchange rate of the Philippines within the period from 1980 to 2019. The relationships between variables based on the developed theoretical framework are analyzed through multiple regression analysis. Empirical results show that external debt and debt services positively impact the exchange rate, while foreign reserves exhibit a negative relationship. The corresponding coefficients indicate that a change in any of the independent variables will cause significant but marginal fluctuations in the exchange rate in the case of the Philippines. The author concludes that external debt encourages the growth of exchange rates in the long run in the case of the Philippines due to its positive relationship. This implies that the Philippine government should aim to focus on more efficient external debt management strategies to enhance the value of the exchange rate of the Philippine Peso relative to other countries. Accordingly, the researcher recommends that the government take the necessary means to reduce the country's external debt to better the economy.

Foreign Reserves of the Central Bank of Iraq and its Influence on Foreign Investment Flows (Applied Research in the Period 2004 - 2019)

The importance of research results from its analysis of a major economic variable, which is foreign investment in an unstable environment that has not been witnessed by any country in the world. And because the research is applied, it has used real data on the work of the Central Bank of Iraq. Therefore, the results they will obtain are concrete results, And the problem of research may therefore be summarized by the following question: Has the Central Bank of Iraq been able to contribute to attracting foreign investment via its foreign reserves?. To prove the main premise of the research, “there is a significant statistical relationship between the Central Bank of Iraq's foreign exchange reserves and foreign investment” the standard quantitative approach has been applied, and the research reached several conclusions, The relationship between the Iraqi Central Bank's foreign assets and foreign investment is positive, and this fits into the theoretical details of the research, which reflects the success of the goal of accumulating such reserves, especially since they increased in the period under discussion, It also reflects the success of the Central Bank of Iraq in managing these assets.

Impact of Foreign Reserves and Economic Growth on Money Supply: Evidence from the WAMZ Countries

This paper analyzes the impact of foreign currency reserve and economic growth on money supply using panel data from five West African Monetary Zone (WAMZ) member states from 2001-2019. The study employed the dynamic technique, fully modified ordinary least squares and dynamic ordinary least squares (FMOLS and DOLS), and the static method (fixed effect model) for the robustness check. The long run results showed that foreign currency reserves (FCR) have a positive impact on money supply, implying that a one percent increase in FCR augments money supply (M2) by 2.87%, 0.44% and 0.08%, respectively, in the long run. Similarly, economic growth is associated with an increase in money supply in both models. Furthermore, the Dumitrescu & Hurlin (2012) estimation revealed a feedback association between foreign currency reserve and money supply. This means that foreign reserves and money supply are complementary. Conversely, a unidirectional causality moving from economic growth to M2 is observed, demonstrating that economic growth causes M2. This outcome is explained by the quantity theory of money (QTM) in which the velocity of money is a positive function of total money supply. As money circulates in the economy as a result of a surge in investments, this consequently increases money stock. Similarly, investment opportunities that are being exploited day-by-day explains the growing money stock (WAMI, 2018). Central banks should endeavor to monitor the expansionary influence of net foreign assets (NFA) on money supply growth in the WAMZ by establishing suitable methods to sterilize foreign exchange infusions into the economy.

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

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.

Empirical determinants of exchange-rate volatility: evidence from selected Asian economies

Purpose This paper aims to explore the empirical determinants of exchange-rate volatility (ERV) in selected Asian economies, namely, Bangladesh, China, India, Indonesia, Malaysia and Pakistan. Specifically, it examines how the volatility of foreign reserves, government spending, industrial production, gold prices and terms of trade affect monthly ERV during the examined period. Design/methodology/approach The authors carry out the empirical analysis by using monthly data for the period January 1997–March 2019. First, the volatility of the underlying variables is measured based on the conditional variances obtained by estimating the univariate (generalized) autoregressive conditional heteroskedasticity [(G)ARCH] model for each variable during the study period. Next, the autoregressive conditional heteroscedasticity (ARCH)-Lagrange multiplier test is applied to ensure that there are no remaining ARCH effects in the residuals. Finally, the multivariate autoregressive-moving average-GARCH (1, 1) models are estimated to examine whether and how the volatility of the underlying variables affects ERV. Findings The results reveal that the current period volatility of exchange rates is significantly affected by ERV in the previous period in all selected countries. The results also indicate that the volatilities of the underlying macroeconomic variables are quite differently related to ERV in examined Asian countries. Foreign-reserve volatility (VFXRES) has negative and significant impacts on ERV in Bangladesh, China and Malaysia. Government-spending volatility is negatively related to ERV in India, whereas it is positively related to ERV in all other examined countries. The results also suggest that although terms-of-trade volatility reduces ERV in both Bangladesh and Pakistan, it amplifies ERV in the remaining examined countries. However, gold-price volatility (VGOLDP) significantly, positively contributes to ERV in Bangladesh, Indonesia and Malaysia. On the contrary, the higher volatility in industrial production (VIPI) results in lower ERV in Indonesia and Pakistan, whereas it increases ERV in China, India and Malaysia. Practical implications The findings have several important policy implications. First, the findings suggest that both Bangladesh and Malaysia should keep an adequate level of foreign reserves to stabilize their foreign exchange rates. Second, as government-spending volatility has a vital role in determining ERV, it is necessary to bring sustainability and continuity in government expenditures. Bangladesh and Pakistan can stabilize their foreign exchange rates by making exports more competitive, viable and accessible. Originality/value This paper significantly contributes to the existing literature by exploring how the behavior of unexpected variations in the factors determining exchange rates affects ERV in selected Asia countries. Most of the published studies have examined the determinants of exchange rates by considering the macroeconomic variables at their levels. Departing from the existing studies, this paper significantly relates the volatility (second moment) of exchange rate determinants to the behavior of ERV. Further, this paper provides firsthand empirical evidence on this issue for the selected Asian economies.

China: capital flight or renminbi internationalization?

During 2014–2016, many analysts have claimed the occurrence of a capital flight in China due to the reduction of the country's foreign reserves by over US$800 billion. This paper aims therefore to answer the question: did China really undergo a capital flight in this period? Its methodology includes a detailed analysis of the Chinese external stocks and flows between 2014 and 2016, and an examination of the currency hierarchy and the international usage of the renminbi (RMB). The authors conclude: the fall in the foreign reserves that occurred in China in 2015–2016 was partially due to (i) a strategy of the Chinese government to diversify its international assets; and (ii) Chinese residents (private entities) increasing their foreign-asset holdings. Besides that, there did indeed occur a capital flight in China in 2015–2016, mostly due to a reduction of the non-resident deposits and loans, but these outflows were partially in RMB. Due to that core difference, the effects on the domestic economy are much lower. Furthermore, the RMB outflows may contribute to the internationalization of the RMB.

Effect of Exchange Rate Fluctuation and Foreign Reserves on Macroeconomic Performance in Nigeria

This study examines the effect of Exchange Rate Fluctuation and Foreign Reserves on Macroeconomics Performance in Nigeria from 1980-2019. The variables of interest include External Debt, Reserves, Exchange Rate, External Debt Servicing and Government Expenditure were analyzed using co-integration, auto-redistribution lag model (ARDL) and Granger Causality test to understand the long and short run relationship between the variables. Result revealed that there is a unidirectional relationship between foreign reserves and the exchange rate. Exchange rate Granger causes foreign reserves in Nigeria, while foreign reserves do not granger cause exchange rate Granger. This means that as the exchange rate depreciates or appreciates, it always has an impact on Nigeria's foreign reserves. The study recommends among other thing that the government should ensure that the country's foreign reserves are used and managed efficiently. This is because it has been established that foreign reserves have a beneficial impact on macroeconomic performance and stimulate economic growth both of which help to enhance the Nigerian economy.

Report of the Board of Directors to the Congress of Colombia - March 2021

In compliance with Act of Congress 31/1992, Article 5, the Board of Directors of Banco de la República hereby submits to the Congress of the Republic of Colombia a detailed report on the measures that Banco de la República has taken in the emergency situation generated by Covid-19 and presents the macroeconomic results for 2020 and the outlook for 2021 for its consideration. Furthermore, the breakdown of the Foreign Reserves and their performance, the financial position of the Bank and its forecasts, and the Bank’s Cultural management are described.