The COVID-19 pandemic and exchange rate pressure: an analysis of emerging countries in the period jan. 2020-jan. 2021

This article investigates the interplay between the exchange rate pressure (ERP), which is a proxy for export demand and foreign financial flows shocks, and fiscal redistribution in influencing poverty in developing countries. The analysis relies on an unbalanced panel dataset containing 90 developing countries over the period 1980–2014 and uses the two-step system GMM approach. Empirical results show that ERP influences positively poverty in developing countries, with the magnitude of this positive effect being the same for least developed countries (LDCs) and NonLDCs (countries not classified as LDCs in the sample). In addition, fiscal redistribution exerts a positive effect on poverty in developing countries, including in NonLDCs, but for LDCs, it leads to lower poverty rates. Interestingly, over the full sample, fiscal redistribution helps in reducing the magnitude of the positive effect of ERP on poverty. A further analysis has been performed by replacing ERP with a measure of terms-of-trade instability. Previous results are largely confirmed, with the exception that terms-of-trade instability exerts a higher positive effect on poverty in LDCs than in NonLDCs. Furthermore, while the positive poverty effect of terms-of-trade instability diminishes as the extent of fiscal redistribution rises, terms-of-trade instability leads to poverty reduction above a certain level of the extent of fiscal redistribution. Overall, these findings indicate that well-designed fiscal redistributive measures could help governments mitigate the adverse effects of external economic and financial shocks on poverty in developing countries.

Spillovers between exchange rate pressure and CDS bid-ask spreads, reserve assets and oil prices using the quantile ARDL model

The study of exchange rate variability and pressures for Asian currency unit

This paper estimates the medium-term determinants of the bilateral exchange rate variability and exchange rate pressures for 20 developed countries in the 1990s. The results suggest that optimum currency area criteria explain the dynamics of bilateral exchange rate variability and pressures, to a large extent.

This paper uses data on the distribution of macroeconomic forecasts during the Asian crisis to show that uncertainty about fundamentals contributes to exchange rate pressures. We ...nd that a greater dispersion of the forecasts increases exchange rate pressures when the mean forecast of fundamentals is “good,” but reduces them when the mean forecast is “bad.” These results are consistent with the theoretical framework of Morris and Shin (1998), which predicts that, as the precision of information diminishes, exchange rate pressures increase or fall depending on whether the public signal and the mean of the private signals are “good” or “bad.” JEL Classi...cation: F31, D84, D82

Conducting a combinational polynomial and spectral analysis of time series formed on the basis of daily observations of changes in the RUB/AZN exchange rate with pronounced fluctuations for the period 11.05.2017- 02.11.2018 based on computer econometric modeling.The purpose of the research. The possibility of describing the global rate dynamics by approximation with a combination of a nonlinear polynomial trend and harmonic oscillations of various frequencies relative to this curve; the ability to calculate amplitudes and phases, which can be used to estimate the power spectrum of the Fourier approximation; the ability to develop a high-precision algorithm for predicting exchange rate changes in RUB/AZN.Materials and methodology. The official statistics of the State Statistics Committee of Azerbaijan were used; classical methods of mathematical analysis and economic analysis; methods of econometrics, harmonic (Fourier) analysis, statistical spectral analysis, “Fourier analysis” of the MS Excel add-in, tools of the Eviews 8 application package with the standard deviation and average approximation error being taken into account, the necessary statistical procedures required for identifying and estimating the parameters of the model and checking its adequacy and accuracy.Results. By breaking up the empirical analysis of given time series into time-scale polynomial and time-frequency components. Combinations of the optimal degree of variants of polynomials up to the 11th degree and the number of harmonics of sines and cosines of all possible discrete frequencies were revealed.Conclusion. This result allows us to reconsider the asymmetric impact of RUB/AZN exchange rate pressure on the foreign trade balance between Russia and Azerbaijan. An increase/decrease in exchange rate pressure affects the likelihood of a ruble-manat crisis, while this phenomenon may negatively/positively affect the foreign trade balance and may make it difficult/easier to import resources, goods and services between countries. This, in turn, adds significance to the task of further detailed structuring and analysis of exchange rate changes in RUB/AZN in the face of increased sanction pressures against Russia, thereby actualizing the development of the retrospective part of the study.

Expectations, disagreement and exchange rate pressure

This article analyses whether exchange rate pressures and speculative attacks against the Brazilian currency during the period of exchange rate anchorage resulted from imbalances in economic fundamentals. An alternative methodological approach is used to test whether the deterioration of economic fundamentals can explain the pressure put on the exchange rate during a period of crisis. The most innovative aspect of this approach lies in the development of a construct of fundamentals for the Brazilian economy that incorporates variables related to the external, fiscal and monetary sectors. The results show that macroeconomic imbalances contributed to the currency collapse that occurred in January of 1999.

The objective of this article is to make an empirical characterization of the initial phase of the COVID-19 crisis, which caused greater turbulence on emerging countries, using an exchange rate pressure index that aims to measure the impacts on the exchange rate and international reserves. Conclusions: i) the most acute period of the crisis occurred in March/20, being among the three largest periods of exchange rate pressure since 2003 — behind October/08 and September/11; ii) Algeria, Brazil, Turkey, Pakistan, Nigeria, Angola and South Africa saw the most severe and persistent effects; iii) in most countries, the external adjustment occurred mainly through exchange rate devaluations — the same pattern as the 2008 crisis.

This study examines the influence of oil prices on economic growth across 51 African countries from 2005 to 2023. It uses pooled Ordinary Least Squares (OLS), Random Effects (RE), Fixed Effects (FE), and the Generalized Method of Moments (GMM) estimations to address issues of endogeneity and dynamic relationships. The analysis includes key macroeconomic variables such as the labor force, capital, exchange rates, inflation, and the current account balance. Results from dynamic panel GMM models show sustained economic growth, indicated by a strong, positive lagged GDP coefficient. Oil prices have a statistically significant positive effect on growth in the RE, FE, and GMM models, highlighting the influence of oil market fluctuations on African economies. Variables like labor force and capital investment support growth, while inflation and exchange rate volatility negatively affect it, reflecting macroeconomic risks. Additionally, the impact of oil prices on economic growth is asymmetric between oil-importing and oil-exporting countries, indicating the vulnerability of African economies to oil price fluctuations. These findings emphasize the crucial role of oil price movements in shaping the economic landscape of African nations and underscore the need for comprehensive macroeconomic policies to manage inflation and exchange rate pressures.

The role of the MSME sector is very strategic for the development of the national economy. MSMEs as the anchor of the national economy have proven to be able to survive the economic crisis that occurred in 1997. However, in its sustainability, the role of MSMEs continues to be overshadowed by difficulties in competing due to various factors that influence it. Therefore, this study aims to analyze the factors that influence the development of the number of MSMEs in Indonesia. The research variables used in this study are inflation variables, interest rates, the exchange rate of the rupiah against the dollar and the number of MSMEs in Indonesia. The type of data used in this study is quantitative data in the form of monthly with a time range of January 2016 to December 2020. The data sources are obtained from BPS, Ministry of Cooperatives and MSMEs. The writing method uses multiple regression in the form of logarithms. The results of the analysis conclude that inflation and interest rate variables have no significant effect on the development of the number of MSMEs in Indonesia. This is due to the fact that people's purchasing power is still weak due to economic shocks originating from the health sector that hit almost all countries in the world, including Indonesia. The rupiah exchange rate variable has a significant effect on the development of the number of MSMEs in Indonesia. the majority of MSME actors in Indonesia, most of the inputs used for production come from abroad, so that exchange rate pressures have an impact on the number of MSME businesses in Indonesia.

Two histories of international monetary developments

The COVID 19 global pandemic has impacted all the economies in a disruptive manner resulting in precariousness and the financial market volatility. Exchange rate pressure in the pandemic situation signifies underlying stress to global policymakers. The present state witness no upsurge in the dollar as against other currencies, vulnerability in the exchange rate is dependent majorly on foreign exchange reserves, commodities and exports etc. The paper tries to investigate the macro economic consequences of corona virus pandemic on the variations in ‘price of Crude oil’, ‘price of Gold’ and on ‘rate of exchange of USD-INR’.
 The literature on the subject mentioned in this paper is for more than a decade, right from 2004 until 2020 for different countries, thus the investigation in this paper is India focused study particularly relevant to COVID-19. Co-integration Test was undertaken to estimate long run relations in the variables. The results reflect co-integration between the three variables doesn’t exist. Granger Causality Test concludes a unidirectional relation in price of crude oil with rate of exchange. Also, crude oil and Gold share a unidirectional relationship whereas the gold price and the currency exchange of USD-INR share a bidirectional relationship.

This paper examines three principal factors--the bilateral exchange rate of percentage change, the proportional change in Belgium international reserves, and the change in the Belgium-German interest rate--to identify exchange rate pressures on the Belgium franc. The first principal factor explained 46.2 percent of the variation and was used to identify 13 of 80 "crisis quarters" (with 1993-III apparently double-counted). The 80 quarters were separated into four historical periods, complete with descriptions of exchange rate pressures and policy actions taken. Oddly, central bank increases in the discount rate ffable 4) seemed at variance with reverses in the direction of the exchange rate pressure (Table 3) during the first two periods. Some additional justification of the demarcations between historical periods would also be desirable.

Inflation would peak in March and start to gradually decline as of the second quarter of 2023, bringing inflation back to the 3% target over the next two years. In March 2023, inflation continued to increase, reaching 13.3%. This increase is mainly explained by higher-than-expected growth of perishable food prices, a demand that remains persistently strong, the high inflation of 2022 being used in many cases to calculate price adjustments in 2023, and the aggregate effects of exchange rate increases in recent months, among others. Starting in the second quarter, inflation would begin to fall and this decline would continue over the next two years. This would occur as food price increases gradually abate, exchange rate pressures on prices would moderate, and import logistics costs and prices of imported inputs, goods and food would continue to temper. Several factors support this expected inflation decline, including lower cost increases measured by the producer price index, decreases in certain measures of inflation expectations of financial market operators or those who monitor the behavior of the economy, and lower observed increases in food prices. The cumulative monetary policy interest rate adjustments will contribute to lower excess spending and reduce inflation. The economy would maintain the high levels of activity already achieved, albeit with lower growth rates, which would contribute to reducing inflation. The economy is growing at a lower pace than in the previous year, which is normal after two years of rapid growth that led to high output levels and a significant decline in the unemployment rate, which is at its lowest level since 2018. The current high production levels are the result of high spending by both households and businesses (consumption and investment). This spending is excessive relative to the country's income, reflected in the strong growth of imports and the large external deficit seen in 2022. The technical staff forecasts economic growth of 1% in 2023 and 1% in 2024, mainly due to moderate consumption and investment. These low growth rates would lessen inflation and the external deficit over the next two years. A heightened policy interest rate is required to ensure price stabilization and contribute to the sustainable growth of the Colombian economy. Accordingly, Banco de la República has adjusted its monetary policy interest rate in response to the high demand and inflation. From September 2021 to April 2023, the Board of Directors raised the monetary policy interest rate from 1.75% to 13.25%.