Interest Rate Fluctuations Research Articles

Navigating Economic Uncertainties: The Role of Technological Innovations in Enhancing Supply Chain Resilience

This study explores the multifaceted impact of economic indicators, financial market dynamics, and technological innovations on supply chain efficiency and resilience. Through comprehensive quantitative analyses, including panel data regression, multivariate regression, and time-series analysis, we dissect the relationship between GDP growth rates, inflation, unemployment rates, interest rate fluctuations, exchange rate volatility, stock market trends, and supply chain performance metrics. Our findings highlight a significant correlation between economic growth and supply chain efficiencies, the exacerbating effect of inflation and unemployment on supply chain costs and demand, and the nuanced impacts of financial market dynamics on supply chain financing and operational strategies. Moreover, we delve into the transformative potential of digitalization, automation, blockchain technology, and advanced analytics in mitigating risks associated with economic fluctuations and financial uncertainties. The empirical evidence suggests that technological innovations not only enhance supply chain resilience but also offer strategic advantages in navigating the complexities of global economic landscapes. This study underscores the critical need for adaptive strategies that leverage technological advancements to sustain supply chain competitiveness in an era of economic and financial volatility.

Firm Characteristics, Interest Rate And Financial Performance Of Microfinance Banks In Kenya

Microfinance Banks gives the forte to improve the economic activity of low-income individuals and eliminate poverty, resulting in economic progress. However, microfinance's Banks financial performance in Kenya has declined over time. The objective of this study is to investigate firm characteristics, interest rate and financial performance of microfinance banks in Kenya. The study was grounded on buffer capital, efficiency structure and interest rate parity theories. The study research methodology rested on positivism research philosophy. Research design was explanatory non-experimental design. Secondary panel data was utilized. 13 microfinance banks in Kenya were target. Information was gathered using secondary data sources from microfinance banks accounting report from 2016 to 2022. Data was analysed using descriptive and inferential statistics. The study used multiple regressions and Pearson’s Product Moment Correlation analysis. All ethical considerations were appropriately observed. Findings indicated that adequacy of capital exerts a notable and direct effect on financial performance, underscoring the importance for microfinance banks in Kenya to prioritize maintaining sufficient capital levels to support their overall stability and financial outcomes. Conversely, quality of asset demonstrates a significant and adverse influence on performance financially, highlighting the need for microfinance banks to enhance their credit assessment processes to ensure the quality of their loan portfolios. The research revealed that efficiency of management has an insignificant direct influence on financial performance of Microfinance banks. To address this, microfinance banks are advised to invest in comprehensive management training programs and capacitybuilding initiatives to improve operational effectiveness and decision-making processes. Earning ability, on the other hand, exhibits a considerable and direct influence on financial performance. Microfinance banks should thus focus on continuous innovation of their products and services to enhance their earning potential and overall financial outcomes. Liquidity levels exhibit an insignificant and inverse effect on the financial performance outcomes. To mitigate potential risks, microfinance banks should establish comprehensive policies and procedures to monitor and manage liquidity effectively. Interestingly, the study reveals that the connection concerning firm-level attributes and financial outcomes for microfinance institutions in Kenya does not appear to be subject to a substantial moderating influence from interest rate movements. Therefore, the survey recommends that microfinance banks concentrate on improving governance structures, operational efficiency, risk management practices, and asset quality. This can be achieved through capacity-building programs, training initiatives, and adopting best practices from successful microfinance institutions. Strengthening these firm characteristics will enable microfinance banks to enhance their financial performance, irrespective of interest rate fluctuations

Measuring Effects of Interest Rate Fluctuations on Retail Loan Holder in Metropolitan City: Evidence from Nepal

Background: Interest rate fluctuations have long been a critical research topic, particularly in relation to retail loan holders. In Nepal, the status of retail loans has been progressively improving, making it essential to understand how interest rate changes affect retail loan borrowers in Kathmandu Valley. Objective: This study aims to investigate the impact of interest rate fluctuations on retail loan holders in Kathmandu Valley. It seeks to determine how these fluctuations influence banking performance and retail loan products in the context of Nepalese financial institutions. Method: A descriptive research design was employed, focusing on retail loan holders from Nepalese financial institutions in Kathmandu Valley. A sample of 383 retail loan borrowers was selected using simple random sampling. Data were collected via a structured questionnaire. The analysis involved descriptive statistics, correlation, regression, as well as pre-estimation and post-estimation techniques. Result: The findings indicate that interest rate fluctuations have a positive and significant impact on retail loan products offered by Nepalese banking institutions. Higher interest rates tend to enhance retail loan offerings, contributing to improved banking performance and increased creativity in loan practices. Conclusion: The study underscores the positive role of interest rate fluctuations in shaping retail loan products and banking performance in Nepal. It suggests that financial institutions could benefit from adjusting their interest rates to foster better loan practices and improve overall performance. For economic benefit, banks should consider lowering interest rates and providing attractive returns to depositors to balance their profitability and enhance financial stability. This research provides a foundation for further academic exploration into the effects of interest rates on retail loan behavior. Paper Types: Research Paper Keywords: Interest rate, Retail banking products, Ordered logistic model, Kathmandu valley. JEL Classification: G1, E43, G21 and G41

Analysis of Apple Financial Risk Management

In the dynamic financial environment of the 21st century, Apple Inc. is a model of innovation and market leadership. It is known for its innovative products and groundbreaking business strategies that have solidified its leadership position in consumer electronics, software and online services. In today's fast-paced and diverse financial environment, where technological advancements and regulatory changes are believed to be the norm, corporations like Apple Inc. are facing a growing number of financial threats, explaining the significance of effective financial risk management. This paper aims to investigate the numerous measures Apple Inc. has taken to reduce its financial risks especially market risks such as currency fluctuations, market volatility, and interest rate fluctuations. Particular emphasis is placed on how Apple strategically prevents the mentioned risks through internal controls and a diversified portfolio, highlighting the effectiveness of these measures. The article also analyzes how Apple manages liquidity, complies with regulatory requirements, and uses the latest advanced technology for analyzing and predicting potential financial risks. The results emphasize how crucial Apple's financial risk management is to uphold its financial standing and ensure the company's long-term survival and stability in an uncertain global economy.

An Investigation into the Impact of Interest Rate Fluctuations by Financial Lending Institutions on Small and Medium Enterprises’ (SMEs’) Loan Repayment among Selected Lusaka-Based Firms

This study purposed to investigate the impact of interest rate fluctuations by financial lending institutions on small medium enterprises’ (SMEs’) loan repayment Among selected Lusaka based SMEs. The issue of high interest rates charged by financial institutions is a significant concern for SMEs in Zambia. The study was guided by three research objectives; to examine the challenges SMEs face in repaying financial credit gotten from financial lending institutions; to find out the effect of interest rate fluctuations on loan repayment among SMEs operating in Lusaka City and to propose a policy framework amenable for stable and affordable interest rate by financial lending institutions operating in Lusaka City. The target population for this research was one hundred (100) SMEs registered and operating in Chilenje market in Lusaka city. This study employed a descriptive design and a mixed-method approach, combining qualitative and quantitative data collection to leverage the strengths of both methodologies. The research population was well-defined and complete for simple random and purposive sampling methods. The research paradigm was rooted in pragmatism, focusing on empirical data to explore the relationship between interest rate fluctuations and SME loan repayment behavior in Lusaka, using a sample size of 53 SMEs from Chilenje market. Data collection involved administering questionnaires with both open and closed-ended questions and interview schedules. This research study successfully established the effect of interest rate fluctuations on loan acquisitions among SMEs operating in Lusaka city. It demonstrated that SMEs are sensitive to changes in interest rates, with the majority indicating that their decision on loan acquisitions is affected by fluctuating interest rates. This underscores the importance of interest rate stability for SMEs in making informed borrowing decisions and managing financial risks. The study advocates for a framework which promotes transparency and market efficiency, implementing regulatory measures to mitigate risk and encourage competition, and facilitating access to credit information and alternative financing options. By comparing these findings with existing research, the study underscores the complex nature of SME loan repayment behaviors in response to interest rate fluctuations and emphasizes the need for collaborative efforts among policymakers, financial institutions, and SME stakeholders to address challenges and promote sustainable growth within the SME sector.

Monetary policy reaction function: A Bayesian analysis for the BRICS.

This study estimates the monetary policy reaction function (MPRF) in a Dynamic Stochastic General Equilibrium (DSGE) framework using Bayesian analysis for the emerging economies. DSGE models are suitable for the policy analysis because of their simplicity and prominent role of forward-looking variables. This is a pioneer study investigating the combined effects of credit spreads, fiscal imbalances, and monetary autonomy on interest rates for BRICS member countries. Using real data for the period 1970-2021, the posterior estimates confirm that both credit spread and fiscal imbalance significantly contribute to fluctuations in output, inflation, and interest rates in all the sample economies. The estimates show that fluctuations in the inflation rate are due to supply shocks. The empirical estimates also reveal that fiscal imbalances shock significantly affect output in Brazil, India, and South Africa, whereas, based on real data inflation and interest rate are significantly affected by fiscal imbalance shocks in China and South Africa. Yet, the findings suggest that the effects of various shocks on output and interest rates vary across countries.

The Mismatch Between Macroeconomic Stability and Declining Stock Performance of Digital Banks in Indonesia: An Empirical Study of 2022-2023

This study examines the mismatch between macroeconomic stability and the stock performance of digital banks in Indonesia over the period 2022-2023. The results of the analysis show that the USD/IDR exchange rate and Bank Indonesia interest rate have a significant negative effect on stock prices, while inflation shows no significant effect. These findings suggest that despite stable macroeconomic conditions, the share prices of digital banks experienced a significant decline, indicating market inefficiencies. This study makes a theoretical contribution by revealing the role of exchange rate and interest rate fluctuations in influencing the stock performance of digital banks in emerging markets. In conclusion, factors such as investor sentiment, market behavior, and the influence of digital financial technology need to be taken into account in developing strategies to support the stability and growth of the digital banking sector in Indonesia. The results of this study are important for policymakers, regulators, and market participants in dealing with the challenges faced by the digital banking sector in Indonesia. Keywords Digital banking, macroeconomic stability, stock performance, market inefficiency.

Implementasi Metode New Jersey dalam Perhitungan Cadangan Premi dengan Suku Bunga Stokastik dan Konstan

Premium reserve allocation represents an obligation undertaken by insurance companies to set aside funds for future claims payment to policyholders. Some insurance companies have faced operational challenges, leading to their closure, primarily due to inaccurate premium reserve computations. This research aims to calculate premium reserve in lifelong insurance using the New Jersey method, an improvement upon the Illionis method. The New Jersey method initiates the premium reserve at the beginning or end of the first year at zero dollars. The majority of premium reserve calculations still rely on constant interest rates. However, in reality, this approach inadequately reflects future fluctuations in interest rates, which are crucial for long-term life insurance products. Therefore, this study implements a more realistic approach using stochastic elements, using the Vasicek stochastic interest rate model to determine premium reserve values. From this research, it was found that there was quite a significant difference between the New Jersey method premium reserve value and the two interest rates. The calculation graph shows that the premium reserve value using the Vasicek model of stochastic interest rates tends to be lower than when using constant interest rates. This can be caused by the results of non-constan variations in interest rates in the Vasicek model which ultimately results in fluctuations in interest rates which wffect the calculation of premium reserve.

Feasibility and sensitivity assessment of various heads for micro-hydropower plant design in the Deluwang watershed, Indonesia

ABSTRACT The escalating global demand for electrical energy, including in Indonesia, underscores the need for renewable energy sources like micro-hydropower plants (MHPs). This study examines the financial feasibility and sensitivity of MHP projects in the Deluwang watershed, Situbondo Regency, Indonesia. Three cases with varying head elevations and discharge rates were analyzed, utilizing crossflow turbines. Case 1, with the highest head and discharge, emerged as the most profitable, demonstrating the highest values for Net Present Value (NPV), Benefit–Cost Ratio (BCR), and Internal Rate of Return (IRR). The study found that on-grid systems, despite higher initial costs, offer more stable revenue and faster payback periods compared to off-grid systems. Sensitivity analysis revealed the on-grid method's resilience to fluctuations in interest rates, project lifespan, and river discharge, maintaining feasibility with up to an 80% reduction in discharge over 15 years. This highlights the importance of strategic planning in MHP design, considering head and discharge rates to optimize power generation. The findings provide valuable insights for renewable energy development, contributing to Indonesia's energy needs and local socio-economic benefits. Future research should further explore the socio-economic impacts of MHP installations to enhance their development and sustainability.

Predict credit risk with XGBoost

The risk of credit loan exists when the bank issues a loan to the borrower, because the borrower has no way to repay the amount or defaults, which exposes the financial institution to the risk of loss. This causes financial institutions to suffer from effects that affect their creditworthiness, loss of capital and increased management and collection of loans. Factors of such risk include, but are not limited to, the creditworthiness of the borrower, the repayment ability of the borrower, and fluctuations in interest rates. With the development of economy, the credit loan risk of financial industry increases, and the harm is greater. After comparing KNN (K Nearest Neighbors), random forest and logistic regression using machine learning methods, we found that the model established by eXtreme Gradient Boosting method (XGBoost) can more accurately identify the risk of credit loans based on the characteristics of the borrower. Our research found that while the XGBoost model has better accuracy, there are also some areas that need improvement.

Effect of Interest Rate Changes on Stock Market Volatility in Congo

Purpose: The aim of the study was to assess the effect of interest rate changes on stock market volatility in Congo. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Changes in interest rates have a notable impact on stock market volatility. When central banks adjust interest rates, it influences investor sentiment and economic forecasts. Typically, an increase in interest rates makes borrowing more expensive, which can dampen corporate profits and economic growth, leading to higher market volatility as investors reassess the value of stocks. Conversely, a decrease in interest rates generally lowers borrowing costs, potentially boosting corporate earnings and economic expansion, which can initially reduce market volatility. However, the long-term effects might differ as lower rates can also lead to overvaluation concerns, eventually increasing volatility. Additionally, interest rate changes signal monetary policy shifts and broader economic conditions, further influencing investor behavior and stock market dynamics. Overall, interest rate fluctuations are a critical factor contributing to stock market volatility through their direct and indirect effects on economic activities and investor perceptions. Implications to Theory, Practice and Policy: Efficient market hypothesis, portfolio theory and behavioral finance theory may be used to anchor future studies on assessing the effect of interest rate changes on stock market volatility in Congo. For practical implications, investors and financial institutions should develop risk management strategies that account for the short-term volatility spikes following interest rate announcements. From a policy perspective, policymakers should consider the lagged effects of interest rate changes when formulating monetary policy to ensure smoother market transitions.

A STUDY OF FINANCIAL SUSTAINABILITY IN INDIAN BANKING INDUSTRY

Financial sustainability has become a catch line in the modern financial systems. This has become a matter of concern in all economies worldwide. Financial sustainability ensures stable and resilient financial health. This comprehensive approach supports the banking sector in generating more revenue, and its strategic planning system is conducive to reducing the level of non-performing assets by managing costs. This allows the financial system to achieve its strategic goals by effectively managing borrowing and credit. Strategic investment decisions help evade financial strain and mitigate probable financial pitfalls. This makes the system more viable and resilient, allowing banks to achieve long-term goals in a zestful environment of financial threats and opportunities. The concept of financial sustainability is a new term in the Indian banking system. Banks are trying their best to adopt and implement it, but are still lagging. To date, only a few banks have incorporated them successfully. Financial sustainability offers many benefits to banks in the form of high productivity, effective management of interest rate fluctuations, controlled non-performing assets, cost reduction, better customer satisfaction, and risk control. Indian banks have acknowledged the significance of financial sustainability and are now committed to achieving it. Banking regulators must incorporate and implement the goal of financial sustainability in the Indian banking system on a priority basis. This study highlights the need to adopt the goal of financial sustainability in the Indian banking industry. Further, the strategies made by the RBI in this direction have been analyzed along with the challenges that banks face during the implementation of these strategies in the real world.

Revisiting the interest rate-investment nexus in India: fresh perspective from non-parametric analysis

PurposeIt is generally believed that business spending on capital expenditure tends to decrease as interest rates rise, and vice versa, this is not always the case. The previous literature produces inconclusive results vis-à-vis the interest rate and investment nexus. This study analyzes the responsiveness of investment to changes in high and low levels of interest rates in India through a quantile-based, non-parametric method utilizing annual data from 1980 to 2022.Design/methodology/approachThis study uses Quantile-on-quantile (QQ) technique proposed by Sim and Zhou (2015) to examine the impact of interest rate quantiles on quantiles of investment. In addition, long-term association and the direction of causality are estimated through the Cho et al. (2015) test of quantile cointegration and the Jeong et al. (2012) Granger causality in quantile (GCQ) test, respectively.FindingsThe empirical evidence validates that the linkage between investments and interest rate is not consistently negative and varies from quantile to quantile. The study finds a negative impact at median quantiles and a positive impact at extreme higher quantiles. Conversely, the impact at lower quantiles is negligible, which is also observed from quantile cointegration, indicating the presence of a statistically significant association above the median quantiles. Additionally, the study finds one interesting finding that there exists unidirectional causality from investment to interest rates in India rather than other way around.Research limitations/implicationsThe study provides significant implications for policymakers as it suggests that during extreme economic conditions, the effectiveness of traditional monetary policy tools to boost capital formation is restricted. Policymakers may consider alternative measures to stimulate investment during these time periods. The study additionally posits that the neoclassical theory of investment may not be readily applicable in emerging economies in its unaltered state, mostly due to the lack of well-developed financial markets.Originality/valueThere is a limited literature available on non-linear linkage between interest rates and investment. The present study adds to the existing knowledge by investigating how investment responds differently to fluctuations in interest rates, while incorporating the complete distribution of both the variables.

RISK ASSESSMENT IN FINANCIAL DECISION MAKING ANALYSIS ON FISHERMAN PERSPECTIVE IN COASTAL REGION: A CASE STUDY

Assessing financial decision-making from a fisherman's perspective in coastal regions involves considering a range of risks. Market volatility, driven by fluctuations in fish prices and changing consumer demands, poses immediate challenges. Environmental factors, such as climate change and natural disasters, can disrupt fishing conditions, impacting yields. Regulatory uncertainties, including shifts in fishing quotas and environmental compliance standards, add complexities. Technological advancements may necessitate investments, while limited access to credit and interest rate fluctuations present financial risks. Study is done with secondary data such as case studies, literature reviews, books, blogs and internet sources. Findings show that it is reasonable to expect that conflicts in fisheries management will increase with time as human population grows and seafood demand increases. KEYWORDS: Risk Assessment, Financial Decision Making, Fisherman, Population, Coastal Region.

Assessment of risk factors to Green, Lean, Six Sigma adoption in construction sector: Integrated ISM-MICMAC approach

The construction industry consumes significant resources, emits considerable pollutants, and generates substantial waste. Green, Lean, Six Sigma (GLS) is an emerging paradigm to control waste, carbon footprint, resource conservation, non-value-added activities, and cost. However, limited focus has been given to the risks involved in GLS construction projects (GLSCPs). This research explored risk factors (RFs) to GLSCPs based on literature review and expert judgments. Brainstorming sessions were conducted to validate the RFs and establish mutual interactions among them through experts' opinions. A 4-level structural model was extracted through Interpretive structural modeling (ISM). The Matriced Impacts Croise's Multiplication Appliqée a UN Classement (MICMAC) was integrated to assess the ‘driving’ and ‘dependence’ power of the RFs. The results show that all RFs are crucial and impact GLSCPs, but the most critical are ‘unstable inflation,’ ‘fluctuations in interest rate,’ and ‘fluctuations in exchange rate.’ This study enhances managers' and policymakers' understanding of RFs associated with GLSCPs and supports effective risk management for successful GLS implementation in construction projects.

Effective Risk Management Strategies for Small and Medium-Sized Enterprises (SMEs) to Mitigate Interest Rate Fluctuation Risks and Ensure Financial Sustainability

Effective Risk Management Strategies for Small and Medium-Sized Enterprises (SMEs) to Mitigate Interest Rate Fluctuation Risks and Ensure Financial Sustainability

Multicountry Time-Varying Taylor Rule: Modeling Unconventional Monetary Policies and Bond Premiums

In the post-financial-crisis era, advanced economies have increasingly adopted unconventional monetary policies such as zero interest rate policy, negative interest rate policy, forward guidance communication, and international coordination policies. Consequently, the traditional Taylor rule has lost some of its explanatory power. This analysis extends the Taylor rule from a single-country to a multicountry analysis using cross-country panel data, incorporating nonmacro factors and stationary correlation in the diffusion matrix for a dynamic factor analysis, specifically covering the Group of Seven countries with datasets compiled by Bloomberg L.P. for the period 1999–2022. This approach comprehensively models these unconventional monetary policies, demonstrating greater statistical validity than existing models. Notably, the model extracts the impact of zero interest rate policy and negative interest rate policy as nonmacro factors and presents the high correlation of residuals as indicative of international coordination among central banks. Additionally, by interpreting the discrepancy between the Taylor rule and actual rate as unintended interest rate fluctuations by central banks, the study posits that interest rates will eventually return to the central bank’s intended fair value. The model’s estimation errors could be treated akin to bond value factors in global risk premia.

Effect of Dividend, Profitability, and Interest Rates on Firm Value with Leverage as Moderating

This research aims to determine the effect of dividend policy, profitability, and interest rates on firm value with leverage as a moderating variable in coal sector firms listed on the Indonesia Stock Exchange. The sampling method uses purposive sampling, with several predetermined criteria, the number of samples is 12 coal sector firms. This research uses panel data analysis. The appropriate panel data model in research uses a fixed effects model. The research results show that dividend policy, profitability, and interest rates have no effect on firm value, and leverage as a moderating variable can strengthen the relationship between dividend policy and profitability on firm value. Companies that use leverage can improve firm performance so that firm value increases. Managerial implications stem from these findings. Executives should adopt dividend policies aligned with firm growth objectivesbalancing shareholder returns with reinvestment opportunities. Enhancing profitability through operational efficiency and strategic decision-making remains paramount. Additionally, monitoring interest rate fluctuations enables proactive management of financing costs and investment decisions. This study examines the influence of dividend policy, profitability, and interest rates on firm value, with leverage acting as a moderating variable. The findings provide valuable insights for managerial decision-making

STRATEGIC TIMING: ANALYZING MARKET TIMING STRATEGIES FOR NON-FINANCIAL COMPANIES' LEVERAGE

This study investigates the impact of market timing strategies on the leverage of non-financial companies. Market timing involves making financial decisions based on expectations of future market movements. Using a sample of non-financial firms, we examine how companies strategically time their debt issuance and repayment activities in response to market conditions. Our analysis considers factors such as interest rate fluctuations, market volatility, and economic cycles. We employ quantitative methods to assess the effectiveness of different market timing strategies in influencing firms' leverage levels. The findings shed light on the dynamics between market conditions and corporate leverage decisions, providing valuable insights for financial managers, investors, and policymakers.

The History of Fed Interest Rate Hikes and the Impact on Stock and Foreign Exchange Markets

Following COVID-19, America uses policies to boost its economy, inadvertently pushing inflation from 2018 to 2022. This paper discusses the history of the Federal Reserve rate increase and its repercussions on financial areas, especially on the stock and foreign exchange markets. The main analysis centers on the impacts of the markets and behaviors of the answers. Initially, the Federal Reserve rate increase seemed economically beneficial. However, long-term effects may negatively impact both domestic and international economies to some degree. By examining historical data, this paper dissects the rationale behind such moves and their direct outcomes. This offers a better perspective on potential future interest rate influences. For investors, to be positive and need to adjust their investment strategies to adapt when they face the Federal Reserve rate increase. For policymakers, during the fluctuations in interest rates, they need to maintain the global equilibrium as far as possible, without excessive disruption or impact.