Foreign Currency Inflows Research Articles

Central Bank Operations Under Foreign Exchange Accumulation: The Case of the Macedonian Central Bank (2005–2022)

ABSTRACT The present article analyses the balance sheet composition and the evolution of the operational framework of the Macedonian central bank. It shows that the compensating movements on its balance sheet could not be attributed exclusively to domestic liquidity management operations, as in the absence of substantial foreign currency inflows, the central bank has increased foreign reserves through the proceeds arising from the issuance of government bonds denominated in foreign currency on international financial markets. Despite retaining some of the characteristics of a currency board, the absence of a strict commitment to such a regime has allowed the central bank to employ a range of instruments of domestic liquidity management and to maintain relatively tight control over its policy rate. The level of the policy rate under a rigidly fixed exchange rate parity meant to be sustained over time, would however continue to depend on the ability of the authorities to ensure a sufficient level of foreign exchange reserves.

Relationship Between Exchange Rate and Inflation in Afghanistan

Afghanistan is an import dependent country and has been facing perpetual trade balance deficit for decades. In case of imperfect competition in the market or existence of market monopoly, there is a higher chance of reflecting the exchange rate changes on the prices of the goods. In Addition, countries with low level of domestic production and higher amounts of imports usually experience higher degree of the exchange rate pass-through effect on inflation. Countries with high import volumes and low export levels often face a deficit in foreign currency inflows and an excess in outflows. These countries need substantial foreign currency to purchase and import goods from both neighboring and international markets, increasing domestic demand for foreign currencies and consequently leading to domestic currency depreciation. This study investigated the relationship between exchange rates and inflation in Afghanistan, examining how exchange rates impact inflation and the benefits associated with exchange rate mechanisms. The primary research questions include: What is the relationship between exchange rates and inflation in Afghanistan? How does the exchange rate influence inflation in the country? What are the benefits of exchange rate systems? The hypothesis posits that higher inflation typically depresses a country's currency value and that exchange rates directly affect inflation. Additionally, exchange rates determine the value of currency exchanges between different nations. This research aims to elucidate the relationship between exchange rates and inflation in Afghanistan, assess the impact of exchange rates on inflation, and explore the benefits of exchange rate systems. The methodology involves a binary system and utilizes secondary data collected from books, websites, and research papers. Findings indicate that Afghanistan's reliance on imports results in a persistent trade balance deficit, with a significant portion of goods, especially non-food items, being imported due to insufficient domestic production. To import goods, Afghanistan requires foreign currencies, which are typically earned through exports of goods and services as of a result, Afghanistan will experience stability in the exchange rate and in the domestic prices.

Value Added Taxbenefits for hotel services in Mexico and other countries.

Tourism is one of the most important economic activities for the development of any country, which is why different benefits are granted to this sector. The objective of this research is to know the VAT benefits for hotel services that exist in Mexico and other countries. It is a qualitative investigation, with a non-experimental, cross-sectional and exploratory design. There are a series of benefits in the different countries that seek to promote and stimulate international tourism; these are granted through tax incentives, such as exemption from paying taxes for the tourist for the services received, to the refund of the same at the time of leaving the visited country. Taking into account how important this activity is due to the economic development it generates, the jobs it creates and the inflow of foreign currency, it is vital to grant it benefits.

ORGANIZATIONAL AND ECONOMIC TRANSFORMATIONS OF THE AGRICULTURAL SECTOR IN THE POST-WAR PERIOD OF ECONOMIC DEVELOPMENT OF UKRAINE

The agricultural sector in Ukraine plays a pivotal role in the country's socio-economic stability and food security. However, the full-scale war with Russia has significantly impacted this sector, necessitating comprehensive organizational and economic transformations to restore and enhance its functionality in the post-war period. This study aims to propose practical recommendations for the organizational and economic transformations required in the agricultural sector of Ukraine during the post-war economic revival period. The research employs a combination of general scientific methods, including abstract-logical reasoning, monographic and terminological analysis, theoretical generalization, economic and statistical analysis, abstraction, and formalization. These methods facilitate the substantiation of theoretical approaches, formation of conceptual frameworks, identification of development trends, and justification of strategic directions for the agricultural sector's transformation. Despite the crisis induced by the war, the agricultural sector in Ukraine has demonstrated financial stability and adaptability. In 2022, agriculture contributed 8.6% to GDP, though this was a decline from previous years. The sector's share in export structure increased, becoming a crucial source of foreign currency inflows despite logistical challenges. The study identifies structural issues such as over-reliance on low-value-added exports, technological dependencies, and economic vulnerabilities tied to the raw material orientation. Recommendations include diversifying production, enhancing value-added processing, fostering technological advancements, and creating investment funds for structural economic reforms. Further research should explore the long-term impacts of proposed transformations, the role of technological integration in agriculture, and the development of policies that balance agricultural productivity with environmental sustainability. Additionally, investigating the effectiveness of investment funds and economic incentives in achieving structural changes will be critical to ensuring the resilience and growth of Ukraine's agricultural sector.

Tourism Activities in the Context of Ecological Footprint: Panel Data Analysis For Mediterranean Countries

Tourism is seen as one of the important sources of economic growth in developing countries. It makes positive contributions to the country's economy, with national income, foreign currency inflow and employment created. While the basis of investments in the tourism sector is primarily to achieve economic gains, today is the sustainable tourism concept emerged and the effects of tourism on the environment have come to the fore. Sustainability in tourism emerges as a new tourism approach that takes environmental damage into consideration. The aim of this study is to examine the relationship between tourism activities and ecological footprint in countries bordering the Mediterranean, using annual data for the period 2001-2021. In the analysis; Generalized Moment Method (GMM), system GMM, constant effects model and random effects models were used. The results of the analysis showed that tourism activities have a significant and positive impact on the ecological footprint of countries bordering the Mediterranean. The findings obtained from the study confirm the expectations that tourism activities increase the ecological footprint by causing environmental degradation.

Presence of Debt Overhung Effect in Pakistan: Empirical Evidence with ARDL Model

Many developing nations, including Pakistan, have struggled with the challenge of maintaining debt sustainability due to insufficient revenue generation to meet economic crises. The primary aim of this study is to find how external debt, debt servicing, and exports influence the economic growth of Pakistan, utilizing data from 2000 to 2020. Augmented Dickey-Fuller test (ADF) is applied to evade spurious regression, revealing that debt servicing is stationary at level. In contrast, GDP, external debt, and exports are stationary at their first difference. For this reason, the ARDL model has been used to find the long-run and short-run interdependence among external debt, debt servicing, exports, and GDP. The empirical findings of this study revealed a negative and significant impact of external debt on Gross Domestic Product (GDP), supported by the “Debt Overhung Effect”. Conversely, debt servicing has a positive but statistically insignificant impact on GDP. Exports have a positive and significant impact on GDP growth. Moreover, to confirm the long-term stability of our model Cumulative Sum of Recursive Residual (CUSUM) and CUSUM of square have been used. This research contributes novel insights to the work conducted by other researchers, shedding light on the intricate relationship among external debt, debt servicing, exports, and GDP growth of Pakistan. Additionally, by estimating the effect of exports on GDP, valuable insights into the country's debt repayment capacity are provided. Export earnings constitute a primary source of foreign currency inflow.

The Effect of Availability of Foreign Exchange and Devaluation of Birr on the Performance of Companies in Ethiopia (Instance of Sample Company)

When a country devalues its currency, some firms and countries generally benefit from any resulting changes in relative prices, while other firms and countries are relatively unaffected or suffer a loss in competitiveness. By taking a sample of import and export firms, this study assessed the effect availability of foreign currency and devaluation of birr on performance of firms in Ethiopia in general. More specifically it intended to assess the main challenges to access foreign currencies, assess the effects of foreign currency shortage on import/export firms, assess the effects of devaluation of Birr on import/export firms and assess company-specific factors. The study used both primary (collected through questionnaire) and secondary data collected from financial statements of the companies. This study applies both the descriptive and inferential analysis. After detail analysis, the increase in private driven business, Informal channels of inflow of foreign currency, increased population and Corruption will worsen appropriate use of forex and aggravate challenges of shortage of forex. And also it is found that the foreign currency shortage has affected the firms in many ways such as profit loss, lay off employees and discourages new investment. On the other hand devaluation of birr against the foreign currencies makes Ethiopian commodities to be competitive in international markets. And it can also attract new investments and export.

THE MINING INDUSTRY AND THE RESILIENCE OF THE ECONOMY OF THE REPUBLIC OF ARTSAKH

During the period of independence, the mining industry has been the driving force behind the development of the Artsakh economy. It has contributed significantly to the country's gross domestic product, state revenues, exports, foreign investments, foreign currency inflow, and employment. The analysis of development trends in the mining industry is crucial for assessing the economic growth. It is well-known that the multiplier effect of the mining industry globally surpasses that of agriculture, energy, financial services, trade, and public catering sectors. However, external influences such as wars and epidemics can disrupt this sector, with the negative multiplier effect spreading to other branches of the economy. This article aims to uncover the connections between the mining industry and the overall economic resilience of Artsakh. To achieve this, we studied the development trajectory of the mining sector, its interactions with other economic sectors, and its effects on macroeconomic indicators. Fundamental research on the subsurface resources of Artsakh was not carried out, resulting in a lack of accurate assessment of this component of the national wealth. Nevertheless, the mining industry provides significant impetus for the economy, becoming the main engine of economic growth. Armenia's economy would certainly benefit more if existing resources were used efficiently and if the republic advanced through the stages of processing these resources.

War Economy: Russia's Economic Development in 2022

After Russia’s invasion of Ukraine, numerous institutes predicted a significant economic slump in Russia in 2022 due to the tightened Western sanctions. This did not materialize. As the energy sector remained almost completely exempt from sanctions until the end of 2022, Russia’s economy saw a significant inflow of foreign currency. This prevented a collapse of the financial system. Statistical data show that in 2022 the war economy was strengthened at the expense of the civilian economy.

EXİSTİNG PROBLEMS İN THE SPHERE OF DEVELOPMENT OF İNTERNATİONAL TRADE İN THE REPUBLİC OF AZERBAİJAN

EXİSTİNG PROBLEMS İN THE SPHERE OF DEVELOPMENT OF İNTERNATİONAL TRADE İN THE REPUBLİC OF AZERBAİJAN

РИНОК ІТ-ПОСЛУГ: ТЕНДЕНЦІЇ ЕКОНОМІЧНОГО РОЗВИТКУ ТА ОРІЄНТИРИ ДЛЯ УКРАЇНИ

The article is devoted to the study of trends in the economic development of the IT services market in Ukraine and the determination of guidelines for the future. It was established that in the context of the integration processes that Ukraine is undergoing, its national economy is affected by a significant number of external and internal factors. And, it is obvious that the identified factors have had an impact on global and local markets in different periods. The market of IT services requires special attention, as it is a strategically important direction for our country - the stability of foreign currency inflows and the activity of attracting investments for development. In the current long period of transformational processes burdened by the war of the Russian Federation against Ukraine, the market of IT services means stable jobs, taxes paid on time and filling the State Budget of Ukraine. The article determines that the field of IT services is the most sensitive, first of all, to economic factors. These are: the volume of the IT market, the exchange rate of the US dollar, the cost of IT services, wages in the market of IT services, etc. An equally important role is played by the geopolitical position of the world's leading countries, which determine (dictate) the "rules of the game" in the IT services market and determine general globalization trends, etc. In the course of the research, we established that during 2017-2021, the number of registered IT service companies in Ukraine doubled. in the world ranking, Ukraine still has advantages in the IT market compared to the nearest competing countries. At the moment, compared to its nearest neighbors, Ukraine ranks 3rd in the world ranking, behind Belarus and Serbia, but ahead of Estonia, Hungary, Poland, Lithuania and Slovakia. Based on the results of the analysis of the data array, the dynamics of the export of computer services from Ukraine during 2017-2021 were studied, which demonstrates rapid annual growth. The trend of growth in the total volume of exports of IT services from Ukraine can be explained by the growth of demand on the world market. And although the IT services market in Ukraine is still being formed, it is important that it further develop in the direction of transparency, openness and competitiveness. And external factors, such as currency fluctuations, globalization processes, etc., did not hold back its development. In order to preserve the growing trends in the development of the IT services industry, it is important to make decisions about its further development based on world experience.

МОНІТОРИНГ ДІЯЛЬНОСТІ АГРАРНОГО СЕКТОРУ УКРАЇНИ ТА ДОНЕЦЬКОЇ ОБЛАСТІ В УМОВАХ ВОЄННОГО СТАНУ

The article examines the economic situation of the agrarian sphere of Ukraine and the Donetsk region in terms of its ability to produce the necessary amount of agricultural products and ensure food security in the conditions of martial law. A significant amount of damage caused by the war is indicated. An analysis of the production of agricultural products in the five years before the full-scale invasion and in the year of the war was carried out. The distribution of the share of participation in production by categories of farms was considered: enterprises and households. The important role of households in providing the country with food during the period of martial law is determined. It is noted that it is easier for small commodity producers to adapt to changing business conditions than for large commodity enterprises. The dynamics of production of agricultural products per capita for 2017–2021 are presented. However, it should be noted that in wartime it is not appropriate to evaluate the efficiency of agricultural work based on these results, because a large number of the population emigrated, and production volumes are unstable. Despite the difficult times, the activity of the agricultural sector is aimed not only at providing for the domestic consumer, but also at the development of the foreign economic market. Even in wartime, the export of agricultural products has a positive trend. Research for 2017–2022 showed that domestic agriculture stably ensures the inflow of foreign currency into the economic space of Ukraine. The share of agricultural products in the commodity structure of foreign trade of Ukraine is considered. It was determined that the most important part of the export of agricultural products and food products is plant products and fats and oils of animal or vegetable origin. Data on production and export volumes of the main products of crop production, which are grain crops and seeds and fruits of oil crops, are provided. It was determined that a significant part of agricultural exports consists of raw materials, therefore, when implementing agricultural export diversification strategies, it is necessary to systematically increase the share of agricultural products that are produced as a result of high-tech processes and have a high added value.

Textile Industry Triumph: Balancing Global Success with Local Production Challenges in the Garment Manufacturing Sector

The collaboration with well-known manufacturers contributes to the enhancement of the country’s potential, allowing to export textiles and clothing. This, in turn will local manufacturers access to international markets through partnerships or joint ventures, opening up new opportunities for growth and expansion, which can lead to foreign currency inflows and a positive trade balance. This can have considerable economic and industrial implications, attracting additional investments and promoting a positive perception of the country’s business environment. Reputable manufacturers will promote the adoption of responsible business practices, by supporting ecofriendly and sustainable practices that are imperative in the current era. Attracting renowned clothing manufacturers is a strategic move that goes beyond immediate economic benefits. It contributes to the long-term sustainable development, technological advancement and global competitiveness of the local textile industry. Hosting well-known clothing producers enhances the country’s reputation.

Content analysis of tripadvisor reviews on safe tourism certified restaurants during the Covid-19 pandemic

Covid-19 outbreak, which emerged in December 2019, deeply affected the economies. During the Covid-19 outbreak, there was a significant decline in restaurant revenues, foreign currency inflows and employment. Moreover, the outbreak has caused radical changes in lifestyles and consumer behaviors. Therefore, this study aimed to evaluate the user comments on the TripAdvisor website regarding Safe Tourism Certified restaurants in Turkey during the Covid-19 outbreak. The universe considered in this study comprised users who ate at Safe Tourism Certified restaurants in Turkey and commented on the Tripadvisor website. The content analysis method, which is used in qualitative research methodologies, was applied. In this context, a total of 922 reviews for 98 Safe Tourism Certified restaurants on the Tripadvisor website over the period of 11 March 2020- 20 April 2022 were examined with the help of Nvivo 12 program. It was revealed that 80.6% of the customer comments were positive. The most emphasized factors in the comments were taste, price, attitude and behavior of the employee, view, food and beverage quality, cleanliness, punctuality, employee care and Covid-19 security measures. These findings can assist in understanding the nature of consumer perceptions during pandemic.

Валютные эффекты применения налоговой политики

The article examines the Russian experience in the field of currency regulation and the instruments that affect the exchange rate of the Russian ruble in crisis conditions. It is justified that the dynamics of the Russian ruble exchange rate depends primarily on the influence of four factors: the state of the economy of the issuing country, state monetary and financial policies, price dynamics of international commodity markets, and instability of the global monetary and financial system. It was established that the Russian ruble exchange rate also depends on the volume of foreign currency purchases by the population; a tendency for an increase in demand for foreign currency on the part of the population during the expectations of the Russian Federation (RF) national currency devaluation with a decrease in world oil prices was revealed. Based on an analysis of the currency policy of the Russian Federation, the authors come to the conclusion that curbing the weakening of the Russian ruble in the face of a decrease in the supply of foreign currency in the domestic market is carried out mainly through foreign exchange interventions and offer additional measures aimed at reducing demand on foreign currency through the introduction of tax instruments. Such measures will reduce the dependence of the ruble exchange rate on the volume of foreign currency inflows into the country, which will increase the efficiency of the Russian monetary policy and, as a consequence, the stability of the Russian economy to external adverse factors. In addition, six additional effects were revealed from the implementation of the proposed tax measures, which will strengthen the financial system of Russia. The proposed tax instruments can be applied in other countries, and the resulting increased demand for precious metals affects the global financial system up to its substantial transformation.

The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan

Increases in oil prices cause inflation. Interest rates are expected to decrease as a result of the expansionary monetary policies of the central banks in response to the indirect effect of increasing oil prices on inflation. Because an increase in oil price creates an additional foreign currency inflow to Kazakhstan, this leads to the appreciation of its national currency tenge. Therefore, this study uses monthly Brent Oil Price (OP), Consumer Price Index (CPI), and Real Effective Exchange Rate (REER) values for the period 2015:M1–2021:M11 to investigate the effect of oil price on inflation and real exchange rate in Kazakhstan. Analysis are performed using the Structural Vector Autoregression (SVAR) model. The results showed that while the Real Effective Exchange Rate mostly affects the Oil Price, the Consumer Price Index variable affects the Real Effective Exchange Rate.

Archaeological Attractions Marketing: Some Current Thoughts on Heritage Tourism in Mexico

Tourism activity in general, with the heritage tourism sector in particular, represented the second inflow of foreign currency to Mexico in 2019 (pre-pandemic), with more than USD 24 million. According to local polls, the main purpose of travel is leisure. However, more than half of tourists (local and foreigner) who visit Mexico enjoy/visit an archaeological site, a museum, and/or a local community. The latter illustrates that the heritage tourism sector is a vital axis within the national and local economy, as well as to promote its research, conservation, and diffusion. Researchers claim that it can also be an important component for the cultural revitalization of communities. However, how well does a community benefit from the tourist activity of any particular heritage/archaeological site? Can they feel any connection with it if only a handful of community members benefit from it? Using the Cancun example, we will talk about the concept of “heritage tourism”, not only for its economic value but also for its potential for social/cultural assessments for local heritage. Secondly, we talk about how archaeology is performed and how pre-Hispanic sites play along as a tourist attraction, particularly from the Mexican perspective.

ЦИФРОВА ЕКОНОМІКА ЯК ФАКТОР ЕКОНОМІЧНОГО РОЗВИТКУ ДЕРЖАВИ

Анотація. Досліджено роль цифрової економіки як фактору економічного розвитку держави. Установлено, що вплив цифрової економіки на економічний розвиток держави можна оцінити виходячи з її впливу на макроекономічні показники. Для оцінки впливу цифрової економіки як фактору економічного розвитку України побудовано регресійні моделі впливу цифрової економіки на валовий внутрішній продукт, темп інфляції та обмінний курс гривні відносно щодо США. Установлено, що розвиток ІТ-послуг в Україні має висхідний тренд, надійність якого становить 96 %. Доведено, що кореляція динаміки зростання обсягу наданих ІТ-послуг в Україні та валового внутрішнього продукту становить 79 %. Це доводить існування взаємозв’язку зростання валового внутрішнього продукту і розвитку цифрової економіки в Україні. Доведено обернений вплив розвитку цифрової економіки на темпи інфляції в Україні. Кореляція між ними становить 67 % і має від’ємне значення, оскільки розвиток ІТ-послуг сприяє зменшенню темпів інфляції та забезпечує підтримання цінової стабільності. Виявлено низький рівень кореляції між обсягом ІТ-послуг в Україні та динамікою обмінного курсу гривні щодо долара США. Це зумовлено тим, що ІТ-послуги споживаються резидентами і призводять до безпосереднього припливу іноземної валюти в Україну. Тестування моделей впливу цифрової економіки, що представлена ІТ-послугами, на показники економічного розвитку України показало: статистично значимий вплив ІТ-послуги мають на темп інфляції. Установлено, що низький вплив цифрової економіки на валовий внутрішній продукт в Україні зумовлений малою часткою цифрової економіки. Доведено, що зі збільшенням питомої ваги цифрової економіки її вплив на економічний розвиток держави зростає. Прогнозування трендових значень параметрів економічного розвитку показало, що в майбутньому в Україні зростатиме обсяг ІТ-послуг, а це сприятиме підтриманню цінової стабільності та зростанню обсягу валового внутрішнього продукту. За умови експорту ІТ-послуг цифрова економіка здійснюватиме позитивний вплив на укріплення гривні щодо долара США. Ключові слова: цифрова економіка, економічний розвиток, ВВП, інфляція, обмінний курс. Формул: 4; рис.: 4; табл.: 3; бібл.: 15.

Public policy tools for Ukraine’s export capacity realization and agricultural financial capacity reinforcement

At the current stage of Ukraine’s socio-economic development, agriculture is the priority industry in the national economy that constitutes a substantial share of GDP, secures the growing volumes of exports and foreign currency inflow, and improves the export-import balance and the country’s position in international labor division. Ukraine’s export capacity is developed and the financial security of agriculture is maintained in conditions of significant problems and obstacles related to the loss of commodities shipment channels and commodities exports in war, consistent low value-added and depth of agricultural processing, high concentration of raw materials, unformed consistent systems of commodities shipment and promotion of the domestic agriculture on external sales markets, limited investment in technical and technological modernization of export-oriented agricultural entities’ capacity, the need to standardize and certify agriculture following international standards of security, quality, quotas, and customs-tariffs restrictions on domestic agricultural exports to external markets. Therefore, to overcome them, it is necessary to introduce a set of tools that includes the diversification of commodities shipment channels and entry of agricultural exporters to the new external food markets, establishment of new manufacturing of high value-added agriculture and expansion of processing, creation of agricultural and processing clusters, the establishment of distribution-logistics chains of domestic products promotion on external markets, improvement of accessibility of investment framework of agricultural companies’ production capacity and export activity development, minimization of transaction costs of agricultural manufacturing and exports, improvement of the system of information and consulting services provided to agricultural exporters, diversification of external markets, and optimal-rational distribution of domestic agriculture on the global market.

The Impact of Remittances of Ukrainian Migrants on the Stabilisation of the Economy During the Covid Crisis

International labour migration is a global process that has affected the populations of all countries and continents. Today, migrants face a new additional barrier – the COVID-19 pandemic, which has drastically affected all forms of human mobility. Today, labour-based migration from Ukraine is directed mainly to EU Member States. The main motives for international labour migration is the potential of earning money, financial security of the family etc. Accordingly, the consequence of international migration is the inflow of money into the country of migrant origin. Remittances from migrant workers are an important source of income for Ukraine. Despite the COVID-19 pandemic, there has been an increase in migrant remittances, contributing to the development of households, human potential, the reduction of poverty and inequality, and the inflow of foreign currency. This article proposes an econometric model of the impact of migrant remittances on the stabilisation of the country’s economy during the pandemic. As a result of the calculations, it was found that the income from people working abroad initially reduces the deviation of GDP from the equilibrium trend, but over time there is a clear procyclical impact. This feature is favourable for the Ukrainian economy and may mean that migrant transfers in times of crisis help to overcome the effects of global economic downturns.