Exchange Rate Changes Research Articles

Особливості використання документарних форм міжнародних розрахунків в Україні

The peculiarities of the use of documentary forms of international settlements by economic entities of Ukraine are analyzed, in particular, advantages and disadvantages, requirements for the use of documentary forms of international settlements, as well as the main directions of innovative approaches to improving their application. The prospects for the development of documentary forms of international settlements in Ukraine are outlined. The stages of decision-making regarding the use of a documentary letter of credit in the implementation of an export operation have been developed. This article analyzed the use of documentary forms of international settlements in Ukraine, which is an important and necessary factor in ensuring the effective and safe implementation of foreign economic activity, especially in conditions of increased volatility of the international environment. The advantage of documentary forms of international settlements is that they provide a high level of protection of the interests of the parties to the agreement. They allow you to avoid risks associated with non-payment of goods delivery, unreliable information about the condition and quality of goods, possible changes in prices or exchange rates and other potential problems. The use of documentary forms of international settlements also ensures trust between the parties by monitoring compliance with the terms of the agreement. However, using a documentary form of settlement can also be a complex and sometimes inconvenient process, as it requires some interaction with paper and compliance with certain procedures. In addition, this form of payment can be expensive due to commissions and other costs associated with banking transactions. Ukraine, as a state with a high level of involvement in international economic relations, actively uses documentary forms for international settlements. This is confirmed by the large number of banks offering this service and the growth of foreign trade volumes. Thus, the use of documentary forms of international settlements in Ukraine is beneficial and necessary to ensure the safety and efficiency of foreign economic transactions. However, it requires some discipline and additional costs. In general, the issue of the use of documentary forms of international settlements in Ukraine requires attention and resolution by improving the legal framework, passing certification courses, improving the qualifications of specialists, and increasing the number of banks that provide services for the use of documentary forms of international settlements. This will help ensure the safety and efficiency of foreign economic activity of Ukrainian companies.

ANALISIS PENGARUH NON-TARIFF MEASURES (SANITARY AND PHYTOSANITARY) TERHADAP VOLUME EKSPOR IKAN TUNA KE NEGARA TUJUAN EKSPOR

This study aims to analyze the effect of Gross Domestic Product (GDP) per capita, economic distance, real exchange rate, and dummy SPS simultaneously and partially on volume of tuna exports to export destination countries. The analysis technique used in this study was panel data regression. The results of this study found that simultaneously GDP per capita, economic distance, real exchange rate, and dummy SPS affect the volume of tuna exports to export destination countries. GDP per capita and real exchange rate partially have a positive and significant effect, dummy SPS partially affects the volume of tuna exports to export destination countries. Meanwhile, economic distance has a negative and insignificant effect on the volume of tuna exports to export destination countries. The implication of this study is that the existence of GDP per capita and changes in the real exchange rate will increase the export volume of Indonesian tuna, the SPS action will reduce the export volume of Indonesian tuna, and the long economic distance will reduce the export volume of Indonesian tuna although not significantly.

The Nexus Between Energy Demand and Currency Valuation: Evidence from Selected OECD Countries

This study focuses on the unequal relationship between energy consumption and its determinants. Past studies have not examined how minor and substantial currency value changes affect energy consumption in the organization for economic cooperation and development (OECD) countries. This study compares the effects of modest and significant exchange rate (ER) changes on energy demand (ED) in OECD countries, which include Greece, Belgium, Ireland, Denmark, Portugal, Norway and Italy. Our work adds to the literature by distinguishing the effect of small to significant changes in currency fluctuations. We do this with a sophisticated model, an updated multiple threshold nonlinear autoregressive distributed lag (MTNARDL). Next, we compare the model’s outcomes to conventional nonlinear autoregressive distributed lag (NARDL) and autoregressive distributed lag (ARDL) models. According to NARDL and ARDL estimates, co-integration is present in the context of Belgium. However, the MTNARDL model division of series suggests cointegration in all sample countries. It implies that this model is superior to previous ones. We conclude with policy recommendations based on the results of our inquiry.

EXCHANGE RATE VOLATILITY OF UKRAINE’S MAIN TRADING PARTNERS

Ukraine, as an open economy under conditions of Russian aggression, is highly vulnerable to the import of exogenous shocks. This is embodied in exchange rate volatility and the emergence of corresponding risks. Most studies are aimed at direct, explicit, or transactional risks. They reflect the negative impact of exchange rate fluctuations on economic entities' cash flows in foreign economic activities. However, changes in currency prices can also affect the subjects oriented to the local market and not carry out operations in foreign currencies by changing competitiveness. One speaks about the indirect, implicit, or economic currency risk in this case. The latter generally arises in the event of volatility in the exchange rates of currencies of importing countries or competitors. The study is devoted to the analysis of indirect currency risks, which reflect potential adaptations of competitiveness due to changes in exchange rates. For this purpose, the currencies of the countries that account for about 80% of Ukraine's trade turnover over the last 10 years, namely the euro, Japanese yen, British pound, Swiss franc, yuan, Indian rupee, Czech krona, Polish zloty, Hungarian forint, and Turkish lira were chosen. The article aims to assess the volatility of exchange rates of Ukraine's main trading partners as a stage of analyzing economic currency risks. The paper uses statistical methods for volatility estimation and distribution characteristics, namely standard deviation, skewness, and kurtosis. The obtained results show that some currencies have a high level of asymmetry and excess, indicating possible unpredictable rate changes. The calculated indicators' generalization allows identifying currencies with relatively high and low risk. The article complements the results of previous studies, as it covers both major reserve currencies and currencies of leading countries whose markets are developing globally and in Europe. Estimates of asymmetry and excess exchange rate distributions are essential for effective currency risk management.

Asymmetric Exchange Rate Effects on Trade Flows in India

This paper examines the role of exchange rate changes on India’s trade. The drivers of exports and imports (income, exchange rate including sectoral differences, and exchange rate variability) are estimated for the short and long run including a structural break. Using annual data from 1994 to 2022, the results of dynamic fixed effects estimation show that both exports and imports are income-elastic in the short and long run, but income elasticity is far stronger for exports. Moreover, exports are responsive to the real effective exchange rate in the short run but not in the long run, and the reverse is true for imports. Furthermore, exchange rates have asymmetric effects for high-volume and primary sectors for exports and imports. The combined impacts show the ineffectiveness of using currency depreciation to address trade imbalances.

Terms of trade or market power? Further evidence from dynamic spillovers in return and volatility between Malaysian crude palm oil and foreign exchange markets

This study examines whether the Malaysian ringgit (MYR) provides terms of trade or market power for crude palm oil (CPO). We consider MYR exchange rates against three currencies of major CPO-importing countries, including the Indian rupee (INR), euro (EUR) and Chinese yuan (CNY). Using daily data on Malaysian CPO prices (spot and futures) and foreign exchange rates (INRMYR, EURMYR and CNYMYR) from 2000 to 2018, our results provide three notable findings. First, volatility spillovers from EURMYR to CPO spot and futures are more significant during the global financial crisis of 2008–2009. Second, the return spillovers from CPO spot and futures to INRMYR and EURMYR exchange rates experience significant bursts after the crisis. Third, the volatility of CPO spot price changes shows the predictive ability of the volatility of INRMYR exchange rate changes at the end of 2018. Overall, our findings support that the terms of trade are a driver of the CPO market after the crisis.

Evaluating the Impact of Inflation and Exchange Rates on the Net Active Value (NAV) of Conventional Mutual Funds in Indonesia

The growing development in the financial industry and the current high inflation rate are a great worry for investment prospects, especially mutual funds. Conventional mutual funds in Indonesia have experienced significant growth in the capital market. In the last 10 years, the number of domestic mutual funds has continued to increase. One measure of investment performance in mutual funds is proxied by the Net Asset Value (NAV) of mutual funds. Therefore, the objective of this study is to evaluate the influence of macroeconomics variables on the NAV of conventional mutual funds in Indonesia. In this study, using commercial bank data in Indonesia, we estimate an empirical model of the effect of inflation and exchange rates on the NAV of conventional mutual funds in Indonesia during the period 2012–2022. We employ a time series model using the Ordinary Least Square (OLS). The main findings show that while inflation has no effect on the NAV of conventional mutual funds, the exchange rate has a significant effect on it because there are many instruments in conventional mutual funds that have invested abroad due to changes in exchange rates that appear with dominant results that do not affect the growth of the NAV of conventional mutual funds. Keywords: macroeconomics, net active value (NAV), mutual funds

A Study on the Asset Management and Taxation Types of the Rich in Japan

The Japanese economy is facing a new phase from a long-term recession over the past 30 years to an annual economic growth of around 2%. With the recovery of the Japanese economy, not only foreigners but also Japanese capital are returning to Japan. Already, the Japanese Composite Stock Price Index has exceeded 39000 points before the bubble burst. Changes in the yen exchange rate are also inducing the inflow of foreign capital into Japan. In this economic trend, investors are paying attention to the Japanese capital market, and in particular, the wealthy in Japan are focusing on the Japanese domestic market to increase their assets. In particular, the Japanese financial market is attracting attention as a relatively safe asset due to the unstable environment at home and abroad. According to this trend, asset management of the wealthy in Japan is also carried out in various ways. Sometimes there are considerable losses due to asset management failures. That is why it has emerged recently to use various tax savings. Companies and individuals show the same behavior. On the contrary, the government sometimes strengthens monitoring in various ways to prevent a decrease in tax revenue. This phenomenon has recently become common in Japan.

The Influence of Foreign Investment and the Rupiah Exchange Rate on Indonesia's Economic Growth

Ordinary Least Square (OLS) is one of the methods in multiple regression analysis to determine the effect of independent variables on dependent variables. To find out the effect of Foreign Direct Investment and Exchange Rate on Economic Growth, a quantitative analysis approach with Ordinary Least Square (OLS) model is needed. The objective of this research is to determine the effect of foreign investment and the rupiah exchange rate on economic growth in Indonesia. This research uses data on foreign investment in various sectors in the last 10 years, changes in the rupiah exchange rate between other countries' currency, and economic growth in Indonesia caused by various factors. And it is concluded that foreign investment has a positive but insignificant effect on the economic growth variable partially and rupiah exchange rate or rupiah exchange rate has unsignificant effect on the economic growth variable partially.

Prediction of Changes in the Exchange Rate between the USD and the CNY and Analysis of Influencing Factors

As one of the important indicators of the global financial market, the fluctuation of the US dollar to Chinese yuan exchange rate not only directly affects the economic development of China and the United States, but also has important significance for analyzing the global economic situation. Analyzing the factors influencing the exchange rate between the United States dollar (USD) and the Chinese yuan (CNY) is one of the key research topics today. Researchers have found that exchange rates are influenced by factors such as national policies and the global political situation. However, there is still a certain gap in the comprehensive and objective analysis of these influencing factors. Therefore, the research topic of this article is to predict the trend of the exchange rate between the USD and the CNY and analyze the influencing factors. This study collected exchange rate data from January 2000 to November 2023 and used the ARIMA model to predict exchange rate changes. This study explores the trend of exchange rate changes by visualizing these data. Research has found that significant changes in exchange rates over the past two decades have also occurred during times of global instability and policy adjustments. The economic development level of China and the United States also directly affects the changes in exchange rates. In addition, the model used in this study also predicted the exchange rate between the USD and the CNY in 2024, providing a scientific direction for predicting the economic development trend in 2024.

Examining the Real Implications of the Purchasing Power Parity

This study focuses on the purchasing power between the dollar and the yuan and its usefulness in forecasting changes in exchange rates in the long run. In particular, PPP theory helps to clarify the inclination of countries with high inflation to incur a depreciation of their exchange rates. The theoretical part highlights the deviations from theory, its causes and its interconnections with other theories that analyse the relationship between exchange rates and other macroeconomic variables. Then, the validity of the theory for the USD / JPY exchange rate is examined from 1980 to 2013. The test found proof in support of the theory at 1% confidence level. Substantial emphasis is given on the effects of the asset price bubble in Japan during 1986 - 1992 and the US economic crisis of 2008 and more specifically on the behaviour of the parity during such a period of increased uncertainty. Received: 25 December 2023 / Accepted: 25 February 2024 / Published: 23 April 2024

Macroeconomic Dynamics and Profitability of Insurance Firms Listed at Nairobi Securities Exchange, Kenya

Kenya’s insurance industry has been growing steadily since 2013, with premium revenue and capital investment increasing. However, Return on Assets has declined over the past four years and reached an all-time low in 2022 compared to the previous five years which was partly attributed to the reforms introduced to cater the impact of Corona virus pandemic on and the need to close infrastructure gaps. As a result, as gross domestic product grows, firm deposits and loans rise along with interest income and loan losses. This study focused on understanding how macroeconomic dynamics affect the profitability of insurance companies listed on NSE in Kenya. It particularly looked into how changes in exchange rates, interest rates, and the overall price rise in the economy (inflation) influence these companies' profits. The study was guided by the theoretical frameworks of purchasing power parity, deflation, the balance of payment, the classical theory of interest, and the balance scorecard model. The study adopted an explanatory research design and targeted the six insurance firms listed on the NSE. The secondary data collection for this study involved the utilization of secondary data sheets. Data was obtained from the official audited financial statements of the insurance firms for the fiscal years 2016 through 2022. Data analysis involved both descriptive and inferential analysis. Inferential analysis incorporated both correlation analysis and panel regression analysis. The study found that key macroeconomic dynamics had significant impact on the profits of insurance companies listed on the NSE, explaining 57.71% of the changes in profits (R-squared = 0.5771). It discovered that while changes in the exchange rate do not significantly affect profits (β = 0.0761, p = 0.5358), higher interest rates lead to higher profits (β = 2.1647, p = 0.0233), and inflation negatively impacts profits (β = -0.3447, p = 0.0011). The study's validity is supported by strong statistical evidence (F-statistic = 21.0100, p-value = 0.0000). It suggests that insurance companies in Kenya should focus on managing risks related to economic changes to improve their financial performance. This research adds to the understanding of how macroeconomic dynamics affect the profitability of insurance firms in the context of the NSE. Keywords: Exchange rates, insurance profitability, interest rates, inflation impact, Nairobi Securities Exchange

Determining the Future Direction and Amount of Tax Revenue in Indonesia Using an <i>Error Correction Model </i>(ECM)

The characteristics of how tax revenues, as well as the macroeconomic factors that are expected to influence and determine tax revenues, develop have become the basic macroeconomic assumptions by the government in compiling various components of the posture of the state revenue and expenditure budget to maintain and increase the expected economic growth. To understand the evolution of tax revenues and the impacts of these variables, it is important to investigate the relationship between tax revenues and specific macroeconomic variables. This study aims to identify the effect of macroeconomic variables on Indonesian tax revenues in the long and short term using multiple regression analysis in an error correction model (ECM). The macroeconomic conditions and variables used in this study are gross domestic product (GDP), inflation, interest rates, and exchange rates. This study employed the time-series data from 2000–2019. The ECM method was conducted in the following stages: stationarity test, cointegration test, and ECM regression test. The ECM model is declared valid, if the cointegrated variables are supported by a significant and negative ECT coefficient value. The statistical analysis, i.e. t-statistic, the F-statistic, and the coefficient of determination, were used to evaluate the significance of the ECM model. The results showed that among the four of macroeconomic variables used in this study, GDP has the highest significant effect on the tax revenue. GDP has a highly positive and considerable impact on tax revenue. The increasing of GDP growth is in line with the realization of tax revenue. A strong positive long-term (t-statistic = 13.94075*, P-value = 0.0000) and short-term (t-statistic = 5.515026*, P-value = 0.0001) association is also observed between inflation and tax revenue. Inflation has a favorable and considerable impact on tax income either in long (t-statistic = 2.298586**, P-value= 0.0363) or short term (t-statistic = 2.515695**, P-value = 0.0258). On the other hand, Bank Indonesia interest rate has a negative insignificant effect (t-statistic = −1.542970ᵈ, P-value = 0.1437) in the long run on tax revenue. However, it has a negative significant effect (t-statistic = −2.699231**, P-value = 0.0182) in short-term tax revenue. A rise in interest rates results in the lowered tax revenues due to the reduction of public consumption patterns, and a decrease in public consumption. The exchange rate has a negative negligible connection in long term (t-statistic = −1.045768ᵈ, P-value = 0.3122), as well as in short term (t-statistic = 1.250076ᵈ, P-value = 0.2333) with tax revenue, meaning that tax revenue is not significantly affected by changes in exchange rate. In conclusion, total tax revenues and the four macroeconomic variables have a significant long- and short-term association according to the ECM analysis with an adjusted R² value of 0.985866 and 0.792880, respectively. Changes in future tax revenues are largely determined by the stability of macroeconomic variables. Therefore, it is highly recommended that the government maintain the stability of macroeconomic variables, especially GDP, because GDP has a dominant influence on tax revenues in the long and short term so that the target of tax revenues can be achieved. The ECM analysis applied in this study can explain the effect of changes in macroeconomic variables on the tax revenue in the short and long term; so that the future direction and amount of tax revenue can be determined in preparing the State Budget and projecting the expected level of economic activity growth in a nation.

APPLICATION OF THE FUZZY TIME SERIES CHEN MODEL IN FORECASTING THE RUPIAH EXCHANGE RATE AGAINST THE US DOLLAR (USD)

The importance of the rupiah exchange rate for many individuals in Indonesia in everyday life can be explained by the fact that the country's economy is very dependent on the international economy. Exchange rate used to do future payments using a certain currency and so on the link between two currencies of different countries. In context In international trade, the US Dollar (USD) currency has a very important role very significantly for developing countries because it is used as an eye transaction money. Therefore, the movement of the rupiah exchange rate is an important factor for a country. So forecasting techniques are needed to anticipate exchange rate changes. In this study, the method used is Chen's Fuzzy Time Series (FTS) model to predict the rupiah exchange rate against the United States Dollar (USD) in the future. The results of this study show that forecasting the rupiah exchange rate against the US Dollar (USD) from May 2023 to July 2023 is stable at a value of 1412.40 Rupiah, with a rate average absolute error (MAPE) of 1.6717%.

Sensitivity of bilateral trade between Korea and China to exchange rate fluctuations: Insights from the semiconductor industry

AbstractThis study delves into the impact of exchange rate fluctuations on the bilateral semiconductor trade between Korea and China. We present compelling evidence emphasising the significant role of exchange rate changes in Korea's semiconductor trade with China, affecting both short‐term and long‐term dynamics. Our analysis also reveals an asymmetrical effect of bilateral exchange rates on Korea's semiconductor trade with China. Specifically, we find that exchange rate asymmetries primarily manifest as a long‐term phenomenon in Korea's semiconductor exports to China. At the same time, they influence both short‐ and long‐term dynamics in Korea's semiconductor imports from China.

The possibility of parallel market correction for exchange rate changes according to the ARDL and ARIMA models

The parallel market is an indicator of the prevailing economic situation in the country, and the exchange rate is one of the important tools that link the local economy to the global economy. It also plays an important role in influencing many variables in the Iraqi economy. Therefore, we find that the monetary authority represented by the Central Bank of Iraq is in a continuous monetary struggle across... Over the past few years and up to the present, we have sought to find accurate solutions to the problem of the difference between the official and parallel exchange rates.As the sustainable and growing difference between the two prices leaves the impression on the public of turning towards the foreign currency in their transactions and reducing transactions in the local currency, then the effect is greatly reflected in the Iraqi economic sectors, especially the commercial sector, causing large and sudden changes in price levels, which creates and stimulates a group of complicit traders and researchers. For their personal gains through illegal and fraudulent means, which harms the interests of society as a whole, and this is what we notice. Despite the attempts made by the Central Bank of Iraq, they did not significantly affect the reduction of the difference between the two prices. Therefore, this study attempted to find a predictive approach between the official and parallel exchange rates through the model. According to the standard forecast, we see that the parallel exchange rate will reach (1433.64) per US dollar in the future for the year 2027. Therefore, the Central Bank, the government, and members of society must use all measures necessary to address the imbalances in the exchange rate.

Currencies and culture: An amusing journey into the impacts of exchange rates on global creative industries

AbstractThis paper examines the impact of exchange rate changes on cultural services trade balances in China, Japan, the United States, United Kingdom, France, and Germany from 2006 to 2015. These six countries represent dominant players whose experiences reflect global impacts. Autoregressive distributed lag (ARDL) models test for J‐curve effects. Cultural distance matrices combined with cluster analysis explore how cultural proximity influences trade structures. Results demonstrate a J‐curve effect in China contrasting with a reverse J‐curve in the United States. China and Japan form one cultural trade cluster distinct from a Western bloc of the United States, United Kingdom, and France. This signifies emerging economies have developed unique cultural trade models. The research enriches empirical evidence on exchange rate impacts for understudied cultural services trade. Introducing cultural distance provides a novel perspective and policy insights for emerging economies.

The development of energy saving measures as a basis of ensuring energy efficiency in higher education institutions in healthcare of Ukraine

The implementation of efficient energy management systems (EnMS) to meet the requirements of ISO 50001 is an urgent problem, taking into account the aggravation of the issue of energy supply and energy saving in the country, especially in the conditions of martial law. The main issue facing higher education institutions (HEIs) of Ukraine when creating rational activities for the use of energy resources is the implementation of an energy management system to meet the requirements of DSTU ISO 50001:2020. The main problems faced by all HEIs now are revision of legislation, rising prices and cost of energy resources, high inflation, frequent exchange rate changes. EnMS will allow each institution to monitor energy consumption and provide an opportunity to develop and implement effective energy saving projects. Aim. To theoretically substantiate and propose practical energy saving measures for a higher education institution (HEI) in the healthcare sector of Ukraine within the framework of the implemented energy management system. Materials and methods. The research materials were data from scientific publications, statistical reports and the results of own research, in particular measures for the energy modernization of electric lighting in public areas of educational buildings of HEI. Such scientific methods as the method of content analysis, comparative analysis, the method of generalization and systematization of information, as well as the methods of mathematical and statistical calculations were applied. Results and discussion. The calculation of electricity costs and savings for lighting public areas of all educational buildings of HEI of healthcare of Ukraine has been carried out, and the need for lighting equipment has been formed. The total electricity savings during the energy modernization of lighting in educational buildings of HEI of healthcare of Ukraine and the total economic efficiency from the electricity savings have been calculated. It has been found that the energy efficiency during the energy modernization of lighting in the educational buildings of HEI is 25,126 kWh/year, and the total economic efficiency from electricity savings is 69,600 UAH/year. Conclusions. Energy saving measures have been proposed as part of the implemented energy management system, which will make it possible to significantly save electricity and reduce the financial costs for its purchase and distribution. This, in turn, will allow HEI to form its own general energy supply strategy aimed at improving both energy efficiency and overall operational efficiency.

Impact of RMB Exchange Rate Changes on Jiangsu’s Foreign Trade

The acceleration of globalization makes the whole world economy full of uncertainty Development has strongly promoted the growth of global trade, on the other hand, the financial crisis of globalization will have a more profound impact on every economy, thus disrupting the balance of the global economy. GARCH model is used to calculate the volatility of exchange rate, and the empirical part analyzes the impact of RMB exchange rate changes on the export trade of Jiangsu Province. A total of 70 periods of monthly data from 2018 to 2023 are used, including two periods of exchange rate reform and epidemic that have a great impact on RMB exchange rate fluctuations. The empirical results show that, the change of exchange rate has a significant impact on the import and export trade volume of Jiangsu Province, and the exchange rate fluctuation has a significant negative impact on the export trade scale of Jiangsu province, which is greater than the import; Finally, for the foreign trade industry of Jiangsu province how to deal with the volatility of RMB exchange rate, this paper puts forward corresponding countermeasures and suggestions from the perspective of government and enterprises respectively.

The J-curve effect in agricultural commodity trade: an empirical study of South East Asian economies

PurposeIn this paper we examine the validity of the J-curve hypothesis in four Southeast Asian economies (Indonesia, Malaysia, the Philippines and Thailand) over the 1980–2017 period.Design/methodology/approachWe employ the linear autoregressive distributed lags (ARDL) model that captures the dynamic relationships between the variables and additionally use the nonlinear ARDL model that considers the asymmetric effects of the real exchange rate changes.FindingsThe estimated models were diagnostically sound, and the variables were found to be cointegrated. However, with the exception of Malaysia, the short- and long-run relationships did not attest to the presence of the J-curve effect. The trade flows were affected asymmetrically in Malaysia and the Philippines, suggesting the appropriateness of nonlinear ARDL in these countries.Originality/valueThe previous research tended to examine the effects of the real exchange rate changes on the agricultural trade balance and specifically the J-curve effect (deterioration of the trade balance followed by its improvement) in the developed economies and rarely in the developing ones. In this paper, we address this omission.