Impact Of Exchange Rate Fluctuations Research Articles

Pegged exchange rate regime and its impact on inflation in BRICS nations: Country-wise evidence

During the 1990s and 2000s, many developing nations accepted fixed exchange rate regimes to sustain price stability. By pegging their currencies to an anchor currency (i.e. US dollar), developing countries could bring credibility and confidence into their economies. The study tries to analyse the impact of the pegged exchange rate regime on inflation in BRICS countries for the period spanning from 2003 to 2022. The result points to the loss of monetary policy autonomy due to the ‘impossible trinity’ coming into play with a steady increase in capital inflows. The country’s large trade surpluses and extensive trade relationships may buffer the impact of exchange rate fluctuations on domestic prices, as changes in the exchange rate may be absorbed by changes in trade volumes or pricing strategies. Other factors like demographic trends or government interventions in markets could overshadow the influence of the exchange rate regime on inflation. The impact of changes in the exchange rate regimes on inflation may operate with lags, meaning that any effects may not be immediately observable in the data. The analysis in this study proposes that exchange rate regimes choice and money supply influence the inflation dynamics in the BRICS countries. It merely reflects the success of the central bank in neutralizing its very effort of maintaining the pegged rate, which gives rise to inflationary growth of the money supply.

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.

How does exchange rate fluctuation affect the efficiency of Chinese enterprises' overseas mergers and acquisitions

With the changes in the global trade environment, the impact of exchange rate on cross-border mergers and acquisitions (M&A) of enterprises cannot be ignored. Taking Chinese listed enterprises as the research sample, we establish a model of the impact of exchange rate fluctuations on the efficiency of overseas mergers and acquisitions. The findings are as follows: (1) Exchange rate fluctuation significantly affects the completion rate of M&A. (2) Exchange rate fluctuations play an important role in shortening the time of overseas M&A. (3) Exchange rate volatility significantly affects M&A efficiency in high-income countries and highly competitive industries.

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

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

Drivers of S&P 500’s Profitability: Implications for Investment Strategy and Risk Management

The financial markets, shaped by dynamic forces, including macroeconomic trends and technological advancements, are influenced by a multitude of factors impacting the S&P 500 stock index, a pivotal indicator in the US equity markets. This paper highlights the significance of understanding the exogenous variables affecting the index’s profitability for academics, portfolio managers, and investment professionals. Amid the global ramifications of the S&P 500, particularly in combating the eroding purchasing power caused by inflation, investing in stock indexes emerges as a means to safeguard wealth. The study employs various statistical techniques, emphasizing a methodical approach to uncover influential variables, and using static regression and autoregressive models for immediate and time-lagged effects. In conclusion, the findings have broad practical implications beyond investment strategy, extending to portfolio construction and risk management. Acknowledging inherent uncertainties in financial market forecasts, future research endeavors should target long-term trends, specific influences, and the impact of exchange rate fluctuations on index evolution. Collaboration across regulatory bodies, academia, and the financial industry is underscored, holding the potential for effective risk monitoring and bolstering overall economic and financial market stability. This research serves as a foundational step towards enhancing market understanding and facilitating more efficient investment decision-making approaches.

The changing performance of inbound tourism under the fluctuation of the Renminbi exchange rate

In the context of the information age in the post epidemic period, China's inbound tourism is increasingly recovering, and related tourism products are gradually coming into the view of foreign consumers. The development of tourism is an important way to promote international relations and improve international influence, while the exchange rate plays an irreplaceable role as one of the important influencing factors of international trade. In addition, the exchange rate reflects the price conversion index between the two countries can effectively explain the international economic situation and the continuous reform of the exchange rate system on China's foreign exchange market has caused different impacts, the exchange rate fluctuations of the RMB may be outside the part of the population with the intention of coming to China to cause a certain impact. In order to explore the impact of exchange rate fluctuations on the inbound tourism industry, this paper combines the background of the post-epidemic period with a view to empirically analysing the issue through macro data, and then exploring the changes in China's inbound tourism market under the fluctuation of the RMB exchange rate from multiple perspectives, as well as the transmission mechanism of exchange rate fluctuations on the inbound tourism market. Ultimately, it will provide certain reference value for the Chinese government and the related tourism industry, so as to effectively promote the development of China's tourism industry and improve China's international influence.

Impact of Exchange Rate Fluctuation on Import and Export Enterprises in China and Japan and Countermeasures

Exchange rate fluctuations have a broad impact on the economy. Generally speaking, exchange rate fluctuations can lead to changes in international trade terms. As two economies, China and Japan, their international trade relations have received much attention. This article aims to discuss the impact of exchange rate fluctuations on the import and export enterprises of China and Japan. Through the analysis of exchange rate fluctuations, we will focus on the impact of the two countries' enterprises on profits, competitiveness, costs and demand, and then discuss the relative responses. Strategies, so as to help enterprises continue to develop in the environment of exchange rate fluctuations.

Impact of Exchange Rate Fluctuation on the Standard of Living in Nigeria

The study examined the effect of the exchange rate fluctuations on standard of living in Nigeria. The variables of gross domestic product per capita (GDPPC), per capital income and unemployment proxied standard of living while the explanatory variables were exchange rate (EXCR), Inflation (INF) Interest rate (INTR) and money supply secondary data was used covering between the period of 1990-2023. Unit root test were carried out to ascertain the stationarity of the variables the result of which Autoregressive Distributed Lag (ARDL) was used to estimate the parameters as they were integrated in the order of 0 and 1. The findings reveal that Exchange rate fluctuation has a significant long and short run relationship with the gross domestic product (GDP) per capita, per capita income and unemployment rate in Nigeria. The implication of this is that living standard in Nigeria is greatly influenced by the alterations in exchange rate. As such the study recommended amongst other things that Government should improve on the productive sector of the economy as the primary sector of the economy that produces the basic commodities used to produce goods and services thereby reducing unemployment and improving standard of living. They should strive to put in place positive economic reforms tailored towards enhancing the economic performance and reducing unfavorable impact of exchange rate fluctuations on the standard of living in Nigeria.

Impact of Exchange Rate Fluctuations on the Quality of Products Exported by Enterprises

Impact of Exchange Rate Fluctuations on the Quality of Products Exported by Enterprises

EFFECT OF EXCHANGE RATE MOVEMENT ON THE NEXUS BETWEEN PUBLIC- PRIVATE INVESTMENT AND ECONOMIC GROWTH IN NIGERIA

This paper investigated the effect that exchange rate fluctuations can engender upon the linkage between public- private and economic growth. Data on public investment (Gross Fixed Capital Formation-Public) and private investment (Gross Fixed Capital Formation- Private) along with the exchange rate were sourced from World Development Indicators (WDI) 2020. The study adopted the Auto Regressive Distributed Lag (ARDL) model for its estimation techniques. The result shows no significant impact of exchange rate fluctuations on both the private and public investment for the study period in the long and short runs. However, the public investment has a negative and statistically significant relationship with economic growth in the long run as well as in the short run. The Federal Government of Nigeria is advised to increase infrastructural investments as a means of correcting the negative trend and come out with far reaching reforms on institutional corruption

Effects of Exchange Rate Variations on Imports and Exports: A Case Study of Pakistan

This study examines the impact of exchange rate fluctuation on Pakistan's exports and imports throughout 2000 to 2019. The current study uses a non-probabilistic approach for the sample selection. Descriptive statistics are used in order to assess the data based on mean, medium, and standard deviation; however, regression analysis is used to analyze the relationship between variables. The purpose of this study is to investigate whether trade flows are influenced by exchange rate volatility symmetrically or asymmetrically, as the exchange rate variations have shown an empathic impact on the economies of developing nations in the past years. The existing study investigates the effect of currency fluctuation in the context of Pakistan. It is generally recommended that policymakers in Pakistan consider the existence and degree of exchange rate volatility as well as the predicted impact of this volatility on specific macroeconomic variables when implementing trade strategies. This will allow for increased trade and foreign direct investment potential. The results of the study show that there is a substantial correlation between exports and exchange rates, with a t-statistics value of 2.01 for the independent variable of currency rates. We find that the exchange rate significantly affects the exports and imports of Pakistan. As the results show, currency fluctuation does affect the imports and exports, so automatically, the economic growth of the country is concerned. Inflation and interest rates are taken as control variables in the existing article.

Analisis Perlakuan Selisih Kurs Mata Uang Asing Pada PT Elang Mahkota Teknologi Tbk

The aim of this research is to analyze the treatment of foreign exchange differences at PT. Elang Mahkota Teknologi Tbk (EMTK), focusing on transaction management, the use of functional currency, and exchange rate risk mitigation. The research method employed is qualitative, with PT EMTK as the research subject. Data was obtained through literature review, referring to the Annual Reports of PT EMTK. The study indicates that PT EMTK adopts a cautious approach in handling foreign exchange transactions. The majority of business units use the Indonesian Rupiah as the functional currency, and the monetary assets and liabilities are adjusted to the exchange rates at the reporting date. Despite the absence of an official hedging policy, the company still considers current market conditions, especially regarding cash and cash equivalents balances in USD. Additionally, the research reveals that PT EMTK conducts sensitivity analysis on exchange rate risk, measuring the impact of exchange rate fluctuations on pre-tax profits. Overall, the company diligently monitors foreign exchange rate risks and takes proactive measures against external factors that may affect financial performance.

Bilateral trade of Turkey-US: Can euro explain this relationship?

This study applies Autoregressive Distributed Lag (ARDL) cointegration method to study the impact of exchange rate fluctuations on Turkey-US trade, considering the third country effect. We estimated bilateral exports and imports of 10 industries between Turkey and the US, collected trade data between Turkey and the US and related exchange rate fluctuation indicators, and established economic models. The results show a two-way interaction effect of exchange rate fluctuations on bilateral trade. At the same time, we find that the third-country effect plays a vital role in Turkey-US trade, and changes in demand and supply from other countries indirectly impact bilateral trade. This study helps to understand the complexity and volatility of trade between Turkey and the US and provides reference for relevant economic policies. These insights help not only address challenges posed by exchange rate fluctuations and third-country effects but also promote stable and sustainable bilateral trade in an evolving global economy.

Factors influencing cost overruns in publicly funded hospital projects

In the context of Vietnam's strong economic development and increasing demand for healthcare, enhancing healthcare infrastructure and addressing the issue of overcrowding in public hospitals has become a crucial government objective. This study focuses on identifying the factors influencing cost escalation in public hospital construction projects funded by public investment. The research applies a non-probability sampling method, using convenient sampling and Referral/Snowball sampling techniques. A total of 120 individuals participated in the study, including investors, project managers, design and construction contractors, subcontractors, and relevant suppliers. The study's findings have identified and ranked the ten most significant factors affecting cost escalation in public hospital projects. These factors include inadequate functional design, inadequate functional design, delay in disbursing public investment capital, unforeseeable events, design errors leading to repetitive construction, impact of exchange rate fluctuations on imported medical equipment, unfavorable weather conditions during construction, delay in providing adjusted contract prices or approving adjusted investment amounts, complex geological conditions, and use of estimated quantity estimates in bidding when design is incomplete. The results of this research contribute significantly to the management of construction costs in public hospitals, particularly in the context of public investment funding.

Evaluating Impact of Exchange Rate Fluctuation and Political Instability on Inflation: A Fresh Insight from Pakistan

Evaluating Impact of Exchange Rate Fluctuation and Political Instability on Inflation: A Fresh Insight from Pakistan

Impact of exchange rate fluctuations on US stock market returns

PurposeThe authors analyze the relationship between exchange rate fluctuations of a number of major currencies and its impact on US stock market returns, as proxied by the S&P 500. Many studies have explored this topic since the early 1970s with varied results and with no evidence that clearly explains the relationship between exchange rates and stock market returns. This study takes a different look at this hypothesis and investigates the pairwise relationship between various exchange rates and the United States stock market returns (S&P 500 INDEX) from January 2000 to December 2019.Design/methodology/approachThe authors test the data for unit roots using Phillip-Perron method. They use Johansen cointegration model to determine whether returns on S&P 500 are integrated with S&P 500. They use the VAR/VECM analysis to test whether there are any interdependencies between exchange rates and stock market return. Finally, they use various GARCH models, including the EGARCH and TGARCH models, to determine whether there exist volatility spillovers from exchange rate fluctuations in various markets to the volatility in the US stock market.FindingsUsing GARCH modeling, the authors find volatility in Australian dollar, Canadian dollar and the euro impact market return, and the volatility of Australian dollars and euro spills over to the volatility of S&P 500. They also find that the spillover is asymmetric for Australian dollars.Research limitations/implicationsOne of the limitations could be that the authors use different bivariate GARCH models rather than the MV-GARCH models. For future project(s), they plan to do this analysis from the perspective of a European Union or a British investor and use returns in those markets to see the impact of exchange rates on those markets. It would be interesting to know how the relationship will change during periods of financial crises. This could be achieved by employing structural break methodology.Originality/valueMany studies have explored the relation between stock market returns and exchange rates since the early 1970s with varied results and with no evidence that clearly explains the relationship between exchange rates and stock market returns. This paper contributes by adding to the existing literature on impact of exchange rate on stock returns and by providing a detailed and different empirical analysis to support the results.

The Impact of Exchange Rate Fluctuation on Toyota Financial Performance and Its Hedging Strategy

In today's globalised economy, the majority of businesses operate in many nations, utilising foreign exchange for imports and exports to expose them to foreign exchange risk. Every business is more or less affected by foreign exchange risk, which is made up of transaction risk, translation risk, and economic risk. By analyzing Toyota's financial reports and comparing financial data of multiple fiscal years (2018 is the base year), including Toyota's derivatives trading volume, foreign exchange income, exchange rate fluctuations of Japanese yen relative to other major currencies, and the average transaction price of currency trading, this study studied the role of financial derivatives in Toyota's foreign exchange risk management. The research results show that Toyota's derivatives transactions in 2018, including forward foreign exchange future contracts and foreign exchange options, strongly offset the foreign exchange risk caused by the appreciation of the yen against the US dollar and the euro. In addition to the derivatives transactions, Toyota also used other risk management policies to reduce its foreign exchange risk. Although the use of financial derivatives can hedge risks, but it will also bring losses to the enterprise. In today's volatile global business environment, each enterprise must choose the appropriate risk management tools for it.

Studying the Impact of Exchange Rate Fluctuations on Tax Revenues in Iran's Economy

Studying the Impact of Exchange Rate Fluctuations on Tax Revenues in Iran's Economy

Analyzing and Measuring the Impact of Exchange Rate Fluctuations on Economic Growth in Iraq for The Period (2004-2022)

This study investigated the exchange rate on Iraq’s economic growth situation. It examined the exchange rate’s effect on GDP, GNP, and INF. An ex-post facto research design was used to collect secondary data from the Central Bank of Iraq and macro trends Statistical Bulletin from 1 January 2004 to 30 November 2022. Hypoth- esis analysis used Least Squares. Exchange rates affect GDP, GNP, and INF. As a result, GDP can be used as an essential basis for economic development, and the GNP is a vital factor for economic infrastructure to change people’s living conditions. The exchange rate positively and significantly impacted GDP, and the analysis sug- gests a significant association between the independent and dependent variables, except for GNP. The study rec- ommends that Iraq’s currency authority manage exchange rates in response to the U.S. dollar to boost economic growth. Price stability can also boost Iraqi economic growth, boosting the dinar’s value.

An Empirical Examination of the Impact of Exchange Rate Fluctuation on Economic Growth in Sierra Leone

Exchange rate fluctuation is considered in the literature as an essential driver of economic growth. This paper aims to investigate the impact of exchange rate fluctuation on economic growth of the Sierra Leone economy. As a whole, the period under consideration is a thirty-nine year period spanning from 1980 to 2018 inclusive. Previous researches show that there can be both positive and negative impact of exchange rate fluctuation on economic growth of a nation’s economy, and in this paper, we discovered that exchange rate fluctuation (depreciation of the Leones) has a positively significant relationship with economic growth in Sierra Leone. We used both ADF-test and PP-test to check for stationarity of the variables. The ordinary least square method was used to analyse data and results are based on regression analysis conducted from available data.