Foreign Exchange Research Articles

The Existence of Riba in the Products of Cryptocurrency Exchange Companies

This paper intends to examine the existence of riba elements (interest) in the products of cryptocurrency exchange companies locally in Malaysia and the international. Two of the chosen international cryptocurrency exchange companies, namely Huobi and KuCoin, and one local company, Luno Malaysia Sdn. Bhd., were analyzed based on their websites and applications. It was found that riba exist in the products offered by international cryptocurrency exchange companies, specifically crypto loans, and lending. Meanwhile, the local one does not offer a product that generates riba. It can be concluded the two products that generate riba seem to be mirroring foreign exchange trading, which comprises leverage and margin in loans and lending. Hence, it is suggested not to subscribe to lending and loans products offered by international cryptocurrency exchange companies. This study implies for Muslim investors, who deal with cryptocurrency. It is recommended to do future research on awareness of riba in the products of cryptocurrency exchanges among Muslim investors.

Impact of the Russia–Ukraine War: evidence from G20 countries

Purpose This paper aims to investigate the impact of geopolitical events of the Russia–Ukraine conflict on the stock market volatility of G20 countries. Furthermore, the paper also investigates the possible reasons for any similarities or differences in the results of the three sectors. Design/methodology/approach This paper measures the impact of the stock market sectoral index price (SIP) by using the daily closing price as a dependent variable. In addition, this study uses three independent variables: geopolitical risk (GPR), commodity price (CP) and foreign exchange rate (FER). Seventeen countries from the G20 are analyzed using a daily timeframe from September 2021 to August 2022 (before and during the Russian invasion). Findings The results revealed that FER, CP and GPR all affect SIP, but the level of significance and positive/negative signs vary in all three sectors. The positive FER affects SIP in all sectors, while the negative CP and GPR significantly impact SIP in the energy and transportation sectors. Research limitations/implications This study’s research model is more suited for transportation and energy than consumer goods. Future researchers can enhance the research model for the consumer goods sector by incorporating additional variables to understand their relationship with SIP better. Originality/value This study explores the impact of the Russia–Ukraine conflict on the stock market in G20 countries, focusing on the top three most affected sectors.

Urban Sprawl’s Impact on Land Use in Kenya: A Systematic Review of Literature

Urban growth is essential in bringing in new opportunities and a larger labour force, but when it is unconventional and unregulated, it tends to raise new threats and problems in the community and the environment. This urban sprawl phenomenon and its impact on land use need to be explored deeply for comprehensive planning and development. Therefore, it is important to analyse existing evidence related to urban sprawl impacts on land use. In this study, existing knowledge on the impact of urban sprawl on land use in Kenya is described through a systematic literature review. The specific objectives of the review were to assess the general characteristics of studies on urban sprawl impact on land use in Kenya, synthesise the findings of these studies, and highlight the gaps in the studies. A search was conducted on the Google Scholar engine, leading to 4317 results from which 21 articles were selected through a systematic screening process. The review established that the majority of the studies are recent, having been published in the last 10 years, have utilised the quantitative approach, and have been conducted in diverse urban centres in Kenya. The findings of the studies revealed that diminishing agricultural land is the most prominent consequence of urban sprawl. The research found that urban sprawl is taking much of the available agricultural land due to increased demand for housing and the creation of new non-farm economic activities. This phenomenon has threatened to cause food shortages, reduced agricultural exports, hence reduced foreign exchange, and lost job opportunities in the agricultural sector. Another impact of urban sprawl is the decline of conservation areas, including bare land, forests, bushlands, and wetlands. Replacement of land under natural cover with built cover has dire consequences for human life and the ecosystem, including increased cases of floods and soil erosion. The results of this study provide insights that can be used to formulate policies related to urban planning, agriculture, and conservation.

PENGARUH MANAJEMEN LABA, STRUKTUR MODAL DAN PERTUMBUHAN PERUSAHAAN TERHADAP NILAI PERUSAHAAN DENGAN PROFITABILITAS SEBAGAI VARIABEL INTERVENING

The agricultural sector plays a crucial role in advancing Indonesia’s economy and enhancing foreign exchange earnings through labor absorption. This study aims to examine the influence of Earnings Management, Capital Structure and Company Growth on Firm Value with Profitability as an Intervening Variable in Agricultural Sector Companies Listed on the Indonesia Stok Exchange during 2020-2022. The research employs a quantitative method. This study’s data analysis and hypothesis testing utilize Structural Equation Modeling – Partial Least Square (PLS-SEM). The hypothesis results using indicate that Earnings Management significantly negatively impacts Profitability, Capital Structure has a positive but not significant impact on Profitability, while Company Growth has a negative but not significant impact on Profitability. Additionally, Earnings Management has a significant positive impact on Firm Value, Capital Structure has a positive but not significant impact on Firm Value, and Company Growth has a significant positive impact Firm Value, Profitability has a significant positive impact on Firm Value. The results of the indirect effects hypothesis testing show that Earnings Management has a negative but not significant impact on Firm Value through Profitability, Capital Structure has a positive but not significant impact on Firm Value through Profitability and Company Growth has a negative but not significant impact on Firm Value through Profitability.

Pre- and Post-COVID-19 Impact on the Tourism Industry in Kashmir and Ladakh

Generally, Tourism includes all kinds of different activities which are associated with tourism industries like hotels and restaurants, tourist guides, transporters, shopkeeper etc on same way, it also include large number of small tourism related activities in different States and UTs because of their geographical areas like Ladakh and Kashmir region their mostly tourism activities are Houseboat, Shakara Safari, Gondola safari, horse riding, Trekking in mountain, Camel Safari, Jeep Safari etc. this type of tourism activities are mostly found in Ladakh and Kashmir region. Because of Barren Land and low agriculture productivity in these regions, mostly Ladakh 90% and Kashmir 60% depends on tourism industry. Tourism generates jobs income, employments; promote long-term growth, benefiting local economies in both the regions. Tourism is huge business in Ladakh and Kashmir regions. Tourism, the country's largest service industry, boosts the state's GDP, foreign exchange, employment, and tax revenue. The Ladakh and Kashmir regions are a popular tourist destination due to its successful development. Suddenly, the Covid-19 outbreak hit Ladakh and Kashmir regions just as tourist season was starting, dampening spirits. Travel and tourism have spread a novel corona virus that is highly infectious. This paper also discusses about the lockdown and has affected the tourism activities in these regions. The serious damaging effects of covid-19 are in 2020, resulting in reduced visitor numbers and travel restrictions, private employments, workers, etc in both the regions of Ladakh and Kashmir. Poorer people (tourist stakeholders) were also severely harmed; the findings show the covid-19 pandemic early effects on tourism and cost.

Comparison of Nonparametric Regression Nadara - Watson Estimator Kernel Function And Local Polynomial Regression In Predicting USD Against IDR

Introduction: Macroeconomic problems such as inflation and exchange rates are often highlighted as benchmarks for achieving economic progress. The stability of both must be monitored by the government in order to control the inflation rate and exchange rate. This instability is a phenomenon of fluctuation, namely the phenomenon of the rise and fall of the exchange rate of a currency based on demand and supply. Given the large impact of exchange rate fluctuations on the economy, the prediction of the wage exchange rate against the US dollar is considered necessary because it is useful to anticipate and minimize bad possibilities that arise. Method: Methods that can be used to analyze fluctuating currency exchange rate data are nonparametric regression, Nadaraya-Watson estimator, Gaussian kernel function, and Local Polynomial Regression. Results and Discussion: The results of a nonparametric regression comparison between the Nadaraya-Watson estimator, Gaussian kernel function, and local polynomial regression were obtained by MAPE of 2.508% and 0.179%, respectively. This shows that the best model uses the local polynomial regression method and predicted USD exchange rate data against IDR using the best model, namely Local polynomial Regression where the MAPE value is less than 10%, which means the prediction rate is very good. Conclusion: The nonparametric regression method of the Nadaraya-Watrson estimator, Gaussian kernel function, and local polynomial regression shows that the best model uses the local polynomial regression method.

Circular economy of the agricultural sector: Strategies and challenges in the context of globalisation

The study aimed to validate the necessity of formulating and executing plans for incorporating the concepts of the circular economy into Ukraine's agriculture sector, while considering the impacts of globalisation and problems arising from the war. This study examined the fundamental principles and intellectual underpinnings that differentiate the circular economy from the conventional economic model. The undamental concept of the circular economy in the agricultural sector was justified, and the primary benefits of implementing this economic model in the field of agriculture were established. The European Commission has approved the strategy for the Common Agricultural Policy for the period 2023-2027. This strategy emphasises the primary responsibilities that EU member states must undertake to implement the principles of the circular economy in agriculture. The primary patterns in the operation of agriculture in Ukraine are recognised, and the significance of the agricultural sector in the framework of gross domestic product (GDP) formation and foreign exchange profits is established. The destruction of infrastructure, mining activities, and occupation of regions resulted in a decline in the cultivated land and animals, leading to a loss in physical productivity. Due to the war, there has been a decline in production and logistics capabilities, resulting in a large fall in the export of agricultural products. Consequently, the profitability of firms in this sector of the Ukrainian economy has also decreased. Ukrainian agricultural firms lack the financial resources to independently support creative development, which includes the implementation of new technology solutions that form the foundation of the circular economy. Considering the effects of globalisation and military conflict, it is justified that prioritising innovation and investment support, particularly by the State, should be a strategic direction for implementing the principles of the circular economy of agriculture in Ukraine. This approach will enhance economic efficiency and create new opportunities

The impact of COVID-19 on global financial markets: A multiscale volatility spillover analysis

This paper presents a comprehensive multiscale analysis of volatility spillover mechanisms among diverse financial markets utilizing a novel combination of Normalized Adaptive Multivariate Empirical Mode Decomposition (NA-MEMD) and Time-Varying Parameter Vector Autoregressive (TVP-VAR) model. Our analysis spans Bitcoin, crude oil, gold, foreign exchange, emerging stock markets, and developed stock markets, examining their respective roles in global volatility transmission. Utilizing the NA-MEMD methodology and a time-varying volatility spillover index, we find that in the short-term, Bitcoin and crude oil primarily act as volatility receivers, while other markets serve as volatility transmitters. Over the long-term, gold and Bitcoin consistently act as volatility receivers, with Bitcoin and gold showing evident safe-haven effects, while the remaining markets primarily function as volatility transmitters. Particularly post-COVID-19, developed stock markets emerge as significant transmitters of volatility, largely directed towards the crude oil market. By evaluating and comparing risk transmission patterns among financial markets before and during the COVID-19 pandemic, our findings offer valuable insights that can assist policymakers and other stakeholders in managing financial uncertainty in times of global crises.

Pakistan's Economy: Fallout of 2022 Economic Distress Magnified the Need for Structural Reforms

This present paper discusses the main issues gripping Pakistan's economy. It takes a long‐term perspective to indicate that several economic issues are structural, going back at least 60 years. The present paper substantiates that Pakistan's current issues were aggravated during 2022, particularly by the damage caused by large scale floods. Government relief efforts increased budget deficits, public debt, and inflation. Crop failures dampened export earnings, increased the current account deficit and added urgency to the need to mobilize foreign exchange for foreign debt servicing during 2023. In 2024, resolving foreign debt servicing obligations is the touchstone for achieving macroeconomic stability and initiating reforms to change structural factors inhibiting Pakistan's economic growth.

Analysis of External Debt and Real Economic Growth of Developing Economies: Nigeria’s Experience

Increase in external debt burden, together with its attendant risk, have become a global phenomenon, ravaging many developing economies, Nigeria inclusive. Global attempts by some economic scholars to validate the relationship between external debt and economic growth have also generated mixed results. Recently, there is an implicit belief by Nigerian public/stakeholders that her increasing level of external debt is adversely affecting her real economic growth (RGDP). This study therefore, empirically investigated the relationship between Nigeria’s RGDP and her external debt (EXD), adding external debt interest charges (EDIC) and nominal foreign exchange rate (NFXR) as control variables. The source of the study data is CBN and it spans for a period of 1980 to 2022. The study applied Co-integration technique, Error Correction Model (ECM) and Granger Causality tests for the econometric analysis. The empirical investigations confirmed that, in the longrun, the selected explanatory variables had significant adverse effect on Nigeria’s RGDP. The Granger Causality test showed that NFXR had unilateral relationship with RGDP, which implies that NFXR determines RGDP without a feedback, while EXD and EDIC established independent relationships with RGDP. The ECM coefficient (-0.154347) is significant and negatively signed. It measures the speed of the adjustment at which equilibrium is restored to RGDP, after the short-run disequilibrium in the selected explanatory variables. This implies that, in the longrun, Nigeria’s RGDP growth process, adjusts slowly to the variations in the selected time series, which indicates a Policy lag effect. The study, therefore, recommends effective and sustainable debt management and monitoring to ensure that borrowed funds are spent on productive projects. Government should seriously pursue effective Exchange Rate management. Finally, the Policy makers should design policies that would match the magnitude of the expected changes in order to counter the lag effect.

Do disinflation policies ravage central bank finances?

Summary Advanced-economy central banks are currently experiencing losses. To examine how rate-tightening cycles affect central bank finances, we study the financial statements of ten advanced-economy central banks during the 1970s and 1980s, the most notable and comparable policy environment to the present. We find that central bank profits actually increased in response to the anti-inflationary measures of the 1980s. We thus discuss how central bank profits depend on their policy instruments as well as their balance-sheet position when rate tightening begins, rather than on the tightening per se. Unlike today, central banks in the 1980s avoided losses because they did not remunerate bank reserves and their balance sheets did not carry the legacy of a decade of large asset purchases at low interest rates and long maturity. Our counterfactuals show that only a combination of these factors could have triggered losses in the 1980s: none of them is sufficient on its own. When losses emerged in the late 1970s, before the Volcker shock, they were due to foreign exchange reserves depreciating. In these instances, when central banks carried them forward and did not rely on transfers from the government, there was no loss of central bank independence or their ability to fight inflation.

Pengaruh Faktor Fundamental dan Risiko Sistematik Terhadap Harga Saham pada Perusahaan Sektor Ritel yang Terdaftar di Bursa Efek Asean-5 Tahun 2021-2023

The capital market is a means for companies to obtain funds from the public through the stock market. Capital markets in the ASEAN region provide new opportunities for investors in ASEAN countries and create opportunities for foreign market stock exchanges. This research aims to examine the influence of fundamental factors and systematic risk on stock prices listed on the Asean-5 Stock Exchange. The sampling technique uses a purposive sampling method. The population of this research is all retail sector companies listed on the ASEAN-5 Stock Exchange with a population of 121 and a sample of 23 companies. Based on research results, return on assets has a positive effect on stock prices, earnings per share have a negative effect on stock prices, debt to equity ratio has a negative effect on stock prices, price earnings ratio has a negative effect on stock prices, and systematic risk has a negative effect on the stock prices of retail sector companies.

Can foreign exchange rates violate Bell inequalities?

The analysis of empirical data through model-free inequalities leads to the conclusion that violations of Bell-type inequalities by empirical data cannot have any significance unless one believes that the universe operates according to the rules of a mathematical model.

Analysis of the Causal Relationship between Money Supply, Foreign Reserves and Bank Credit in Oil Countries: Evidence from Iraq

This study investigates the causal relationships among money supply, foreign reserves, and bank credit in Iraq, a major oil-producing economy. Understanding these interconnected variables is crucial for effective monetary policy formulation and macroeconomic stability. this study employs the Toda-Yamamoto approach to Granger causality testing and quarterly data spanning from 2004 to 2022 to capture the dynamics following the Iraq War and explore the post-conflict economic landscape. Granger causality tests are conducted to determine the direction of causality among the variables. Impulse response functions and variance decompositions provide insights into the magnitude and persistence of shocks, shedding light on the relative importance of each variable in influencing the others. The empirical findings reveal a bidirectional causal relationship between money supply and foreign reserves, indicating that changes in one variable significantly influence the other. Additionally, a unidirectional causality is observed, running from foreign reserves to bank credit, highlighting the significance of foreign exchange reserves in facilitating bank lending. However, no causal link is detected between money supply and bank credit, suggesting that monetary policy may have limited direct impact on credit expansion in Iraq’s banking sector. These results have important policy implications for the Central Bank of Iraq in managing monetary policy tools and navigating the challenges of an oil-dependent economy. The study contributes to the literature on monetary economics in resource-rich countries and provides valuable insights for policymakers and researchers alike.

Hedging global currency risk: A dynamic machine learning approach

We propose a dynamic method to hedge foreign exchange risk of international equity portfolios. The method is based on the currency return forecasts derived from a set of alternative machine learning models, built on the main factor components of the currency return time series. To illustrate our method, we take the perspective of a US portfolio manager investing in a global equity portfolio of developing and developed economies. The analysis of several model performance indicators, back-tested on data from 27 October 2008 to 30 December 2022, allows to conclude that accurate predictions of global currency factor returns, such as those obtained with non linear machine learning models, can improve currency risk hedging of global equity portfolios.

Measuring systemic risk in Asian foreign exchange markets

This paper measures systemic risk in eight Asian foreign exchange markets between 2015 and 2021. We define systemic risk as the risk of significant devaluation in a large number of currencies. Our measures, derived using a time-varying factor copula model, can take into account heterogeneous and dynamic dependencies among markets. Our empirical findings reveal that (1) systemic risk spiked during the US-China trade conflict and the COVID-19 pandemic; (2) Among the currencies studied, the Japanese yen contributes most to systemic risk, while it is the least vulnerable to systemic shocks; (3) Higher levels of regional trade and financial integration increase a currency's vulnerability to systemic risk in the Asian foreign exchange markets.

Competitiveness of Bali Province’s Cocoa Exports in the International Market

International trade greatly influences a country's economic growth. If a country exports more than it imports, that country's national income will increase, thus having a positive effect on economic growth. Indonesia has various products that are traded on the international market, one of which is cocoa produced by Bali Province. This research aims to analyze the competitiveness of Bali Province's cocoa exports in the international market along with the factors that influence the cocoa commodity exports. This research is quantitative descriptive research with the data used is annual data on the value of Bali Province cocoa exports for a period of 12 years from 2010 to 2021. The data collection technique used in this research is a literature study in the relevant agency (Disperindag Bali Province). Based on data analysis, it was found that Bali Province's cocoa exports in the period 2010 - 2021 did not have a comparative advantage as shown by the RCA analysis value of 0.54. Meanwhile, if we look at the competitive advantage based on the EPD analysis value, it is found that on average the Bali Province cocoa commodity is in a falling star position, which means it has a competitive advantage but low competitiveness. The export value of Bali Province's cocoa commodities is significantly influenced by the amount of cocoa production, the USD exchange rate, and inflation. Meanwhile, the international price of cocoa has not had a significant effect on the value of Bali Province's cocoa commodity exports.

Competitiveness of Bali Province’s Cocoa Exports in the International Market

International trade greatly influences a country's economic growth. If a country exports more than it imports, that country's national income will increase, thus having a positive effect on economic growth. Indonesia has various products that are traded on the international market, one of which is cocoa produced by Bali Province. This research aims to analyze the competitiveness of Bali Province's cocoa exports in the international market along with the factors that influence the cocoa commodity exports. This research is quantitative descriptive research with the data used is annual data on the value of Bali Province cocoa exports for a period of 12 years from 2010 to 2021. The data collection technique used in this research is a literature study in the relevant agency (Disperindag Bali Province). Based on data analysis, it was found that Bali Province's cocoa exports in the period 2010 - 2021 did not have a comparative advantage as shown by the RCA analysis value of 0.54. Meanwhile, if we look at the competitive advantage based on the EPD analysis value, it is found that on average the Bali Province cocoa commodity is in a falling star position, which means it has a competitive advantage but low competitiveness. The export value of Bali Province's cocoa commodities is significantly influenced by the amount of cocoa production, the USD exchange rate, and inflation. Meanwhile, the international price of cocoa has not had a significant effect on the value of Bali Province's cocoa commodity exports.

Portfolio optimization beyond utility maximization: the case of driftless markets

This paper presents a novel perspective on portfolio optimization by recognizing that prices can be expressed as a scaled likelihood ratio of state price densities. This insight leads to the immediate conclusion that the optimal portfolio has a simple representation in terms of the likelihood ratio between the agent-defined physical measure and the risk-neutral measure, eliminating the need for utility maximization. The agent only needs to specify her choice of the physical measure, and we demonstrate both frequentist and Bayesian approaches for this selection. Utility maximization can be seen as a specific method for choosing the physical measure. The resulting likelihood ratio is log-utility optimal with respect to all benchmarks, aligning our approach with finding the growth optimal portfolio described in the literature. Notably, the expected log return corresponds to the relative entropy between the physical and risk-neutral measures, establishing a fundamental link to information theory. As a proof of concept, we explore previously unexplored territory in portfolio optimization, specifically addressing perceived mean reversion in specific driftless markets, such as foreign exchange (FX) markets.

Law Certainty for Farmers and Oil Palm Plantations Established in Forest Areas after The Issuance of The Job Creation Omnibus Law (Case Study: Tanah Laut Regency, South Kalimantan Province)

Palm oil is a leading commodity for Indonesia's foreign exchange and is a plantation crop that has experienced rapid production growth compared to other plantation crops in Indonesia. Many residents in Tanah Laut Regency have been planting oil palm in forest areas after the issuance of the Omnibus Law. However, the Omnibus Law and its derivative regulations only accommodate the community and oil palm plantations that were already established before the law was issued. If any party plants oil palm after the issuance of the Omnibus Law, whether it is a corporation or individuals, they will be strictly prosecuted by law enforcement officials formed by the government, consisting of the Police, the Prosecutor's Office, and the PPNS KLHK. The purpose of this research is to analyze and gather information on the legal aspects through regulations and the aspirations of the community involved in oil palm planting, the potential impact of law enforcement related to oil palm plantations planted after the issuance of the Omnibus Law, and possible alternative policies that the government might adopt. The research methods that will be used are normative (examining regulations) and empirical (surveys and observations). The results of this research will produce policy formulations in the form of special regulations for farmers and oil palm plantations that have already been established and the continuation of the TORA program, considering aspects of forest and environmental sustainability.