International Exchange Rate Research Articles

Do International Oil Prices, Exchange Rates and Agricultural Credit Matter for Farmers’ Term of Trade in Indonesia? Empirical Evidence of Multiple Thresholds and Asymmetric Effects

Farmers still survive as a livelihood for some of the Indonesian population as the dominant economic sector shifts from agriculture to industry and services. This study investigates the influence of international prices of crude oil, fertilizer, and animal feed ingredients, as well as exchange rates, domestic inflation, agricultural credit, and food production indices on farmers' terms of trade (TOT). The study applies a Nonlinear Autoregressive Distributed Lag model with multiple thresholds. The data used are monthly data for the period January 2010 to October 2023. Through multiple thresholds, the negative impact of world oil prices is significant in the middle level of changes in oil prices on farmers' TOT. Fuel subsidies to farmer households allow the impact of significant changes in oil prices to dampen farmers' TOT. Depreciation of the rupiah exchange rate significantly reduces farmers' TOT. Conversely, appreciation significantly increases farmers' TOT. Domestic inflation has significantly pressured farmers' TOT in the short run, while agricultural credit significantly increased farmers' TOT. The food industry production index significantly encourages an increase in farmers' TOT. The subsidy programs, especially fuel and fertilizer subsidies directly to farmers, are the action to reduce the impact of rising prices of imported crude oil and fertilizer.

Human Resource Indicators and Bank Performance

Accelerated globalization and the thirst for economic emancipation of the people create demographic shifts from developing countries to developed countries. To assist policymakers in effective decision making regarding labor migration and economic growth, our paper explores the hidden dynamics between labor migration and economic growth in Bangladesh from 1988 to 2020. The study was developed based on the Auto Regressive Distributed Lag (ARDL) framework to capture long-run and short-run dynamics among the variables. To find the directional relationship, we also perform the Toda Yamamoto Causality test to find the short-run impact on the dependent variables. The existence of co-integration among the variables is demonstrated by the Bounds test result. The empirical results show the long and short-run positive significant relationship between international labor migration and exchange rate. However, Inflation and GDP growth do not have any significant impact on migrant laborers from Bangladesh to abroad. The causality approach indicates a unidirectional causality between labor migration and exchange rate, GDP growth, and exchange rate. This paper suggests that the devaluation of the local currency would be a possible way to boost labor in Bangladesh.

Open Economy Macroeconomics: Developments in Theory and Policy Using the TOPSIS Methodology

Open economy macroeconomics examines the complex interplay between a nation's economic policies and global financial markets. This field of study addresses critical issues such as exchange rate determination, balance of payments, and the effects of trade and capital flows on a country's economic performance. The increased integration of economies through globalization has made it essential to understand how domestic economic policies, such as monetary and fiscal policies, interact with international economic environments. This paper explores the key concepts and models in open economy macroeconomics, including the Mundell-Fleming model, purchasing power parity, and the dynamics of exchange rate regimes. The study of open economy macroeconomics has gained prominence with the growing interconnectedness of global markets. Unlike a closed economy, where all economic transactions occur within national borders, an open economy engages in trade and financial transactions with other countries. This openness introduces new challenges and opportunities for policymakers, as domestic economic conditions are increasingly influenced by external factors such as foreign exchange rates, international trade agreements, and global capital flows. Open economy macroeconomics seeks to understand how these external factors affect key economic variables, such as output, inflation, and employment.The significance of studying open economy macroeconomics lies in its profound implications for both national and global economic stability and growth. As economies become increasingly interconnected, understanding the mechanisms by which international trade, capital flows, and exchange rates influence domestic economies is essential for effective policymaking. This field of study is particularly relevant in today’s world, where financial crises, trade wars, and global economic shocks can have ripple effects across borders, impacting nations' economic well-being regardless of their size or level of development.. Free Trade Agreements, Currency Pegging, Capital Controls, Trade Tariffs, Exchange Rate Floating. GDP Growth Rate (%),Trade Balance (Billion $), Inflation Rate (%),Unemployment Rate (%). The results indicate that Free Trade Agreements achieved the highest rank, while Capital Controls had the lowest rank being attained. The value of the dataset for Corporate Open Economy Macroeconomics according to the topsis Method, Integrated Pest Management achieves the highest ranking.

Do Global Food Commodity Prices Determine Inflation in India?

This article investigates whether global food commodity prices and the exchange rate affect domestic food prices and overall inflation in India. We employ the Johansen (1991) cointegration method in conjunction with a single equation error correction model. We find that inflation in India is highly dependent on international food commodity prices and exchange rates. High international food prices contributed about 2 percentage points of the 3.7 percentage point increase in inflation observed during the global food crisis (2007–2008). JEL Codes: C22, E31, E41

The Dynamics of Tourism, Economic Growth, and CO2 Emissions in Uzbekistan: An ARDL Approach

In this study, we examined the impact of key macroeconomic variables on the sustainability of tourism in Uzbekistan using open data from the World Bank from 2000 to 2023. The selected variables for the study include the number of international tourists, GDP, CO2 emissions, and exchange rates. Considering the importance of climate issues in ensuring sustainable tourism, the study combines these factors using the autoregressive distributed lag (ARDL) model to assess their long-term relationships. We chose this model due to its flexibility in dealing with variables of different integration orders. The results of the bounds testing procedure confirm the existence of a long-term cointegration relationship between the dependent variable (international tourist arrivals) and the selected macroeconomic indicators. Specifically, the study results indicate that GDP growth, exchange rate fluctuations, and CO2 emissions positively affect tourist arrivals to Uzbekistan. The findings of this study underscore the importance of infrastructure development and macroeconomic stability in attracting international tourists while emphasizing the need for sustainable international practices to mitigate environmental impacts. This study contributes to understanding the complex interrelationship between tourism development and macroeconomic variables in the context of developing countries and aids decision-making in this area.

Analysis of Risk Management and Prevention Strategies in the International Operations of Enterprises

With the deepening of globalization, more and more enterprises are looking towards the international market in search of broader development space. However, international operations not only bring unprecedented opportunities but also accompany various risks. This article delves into the risks enterprises may encounter in international operations, including market, political, economic, exchange rate, legal, and cultural risks, and systematically analyzes the causes, manifestations, and impacts of these risks. Through specific case analyses, this article proposes a series of practical risk management and prevention strategies aimed at helping enterprises build a more robust international operation defense line, ensuring their steady progress in the complex and volatile international market.

Gold Price Inflation and Its Implications for Financial Markets: Strategies for Mitigation

Abstract: Gold prices are among the most important indicators in the global financial market. The international gold price has continued to rise in recent years, repeatedly setting new records, accompanied by a boom in gold consumption and investment. The rapid rise in gold prices is due to a combination of factors. Supply and demand, economic conditions, and geopolitical events can lead to price fluctuations. Among them, economic conditions depend on monetary policy, inflation expectations, and market volatility, which may affect the trend of gold prices. The rise in gold prices has exacerbated market volatility and put higher demands on risk management for financial institutions. At the same time, the rise in gold prices has also affected the entire financial industry and changed traditional asset allocation strategies. This article examines the influence of increasing gold prices on the financial market and proposes potential preventive measures or solutions through a survey of literatures, theoretical analysis and logical reasoning. At the same time, this can help financial traders plan their funds reasonably, reduce the impact of inflation and currency devaluation, and better cope with changes in international trade and exchange rates, thus allowing the financial market to operate better.

The Tunisian Central Bank’s Efficiency Benchmarks: A Dynamic Approach

The topic of banking performance and efficiency has received considerable attention, yet there is a noticeable gap in examining the performance and efficiency of central banks. Moreover, there is a scarcity of studies on central bank efficiency. This paper aims to investigate the factors that influenced the efficiency of the Central Bank of Tunisia from 2000 to 2020, using an Autoregressive Distributed Lag Model. The appropriate econometric methodology was first established to achieve this goal, after which the model's results were presented and interpreted. The study's findings indicate that the Tunisian Central Bank’s efficiency is influenced by several macroeconomic (inflation, public deficit, growth rate), international (exchange rate, foreign debt), and political variables (political and government instability, conflict of interest), each with a varying degree of impact. Interestingly, the transition of the Central Bank of Tunisia from a dependent to an independent institution in 2016 did not yield a notable change in efficiency.Copyright© 2024 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

THE IMPACT OF TAXATION ON INTERNATIONAL COMMERCE AND EXCHANGE RATE ON IMPORTS

The globalization of capital markets has accelerated capital movements, turning the world into one large marketplace. International trade has become an important tool in shaping the financial structure of countries. However, elements such as customs duties and import quotas play a decisive role in trade between countries. Taxes, which are a financial policy tool of countries, are used to influence foreign trade, particularly imports. One of the determining factors in foreign trade activities is the exchange rate. The purpose of this study is to examine the effect of taxes on imports and the change in the nominal exchange rate on the import volume of goods and services. In this study, which examined 20 Organization for Economic Co-Operation and Development (OECD) countries with data for the period 1999-2021 taken from the World Bank official website, the model was analyzed with the help of AR (1) Residual Random Effects Generalized Least Squares Regression Model Estimator. The analysis revealed that increases in international trade taxes and exchange rate increases reduce the import volume. This result empirically supports the conclusion that taxes on international trade and reductions in exchange rates increase import volume.

A Study of Factors Influencing Corporate Debt Default

With the global debt rate rising at a high speed in recent years, the risk of corporate debt default has also increased gradually, in order to explore the influencing factors of corporate debt default and let enterprises better avoid the risk of debt default. This paper discusses the impact of corporate debt default from internal and external, macro and micro levels, from the aspects of corporate investment and financing strategy, management's investment preference, corporate governance structure, corporate strategic positioning and the differences between the same industry, external macroeconomic environment, national policies and international exchange rate impact, and the degree of opening up of the capital market to the outside world. Corporate debt can be influenced by several factors, and a clear understanding of the relationships and mechanisms between the factors will help to propose feasible debt reduction programs that will lead to more robust corporate development.

Analysis of the Effect of Foreign Direct Investment, International Tourism Receipts, and Exchange Rate on GDP in ASEAN-4

The dynamically evolving global economy creates great challenges for policy makers. Southeast Asia as a regional economic driver seeks to strengthen strategic measures through ASEAN. However, economic fluctuations become a problem as the economy grows in the region. The purpose of this study is to analyze the effect of Foreign Direct Investment, International Tourism Receipts, and Exchange Rate on Economic Growth in four ASEAN countries (Indonesia, Malaysia, Thailand, and the Philippines). The methodology used is panel data regression with a time span from 2013 to 2022, focusing on four ASEAN countries. The independent variables in this study are foreign direct investment, international tourism revenue, and exchange rate, while the dependent variable is gross domestic product. The results showed that the variables of international tourism receipts and exchange rates had a significant effect on economic growth, while the variable of foreign direct investment had no effect on economic growth.

Editorial

The Journal Scientific Research World Economy EconConnections - Professionals On Line, plays an essential role as the main platform for the dissemination of theoretical and empirical research in a wide range of disciplines within the field of economics and related areas. Enveloping a wide range of topics, it stands as the primary channel for the exploration of general economic theory, political economy, business economics, industrial economics, labor economics, urban and rural economics, development economics, technological economics, tourism economics, transportation economics, macroeconomics, microeconomics, quantitative economics, resources and environmental economics, economic history and demography, as well as international trade, exchange rates, finance , accounting and insurance.

Heterogeneity in the nominal exchange rate response to oil price shocks in oil-exporting countries: a new episode of the ‘fear of floating’?

ABSTRACT In this paper, we propose that the heterogeneity in the nominal exchange rate response to oil price shocks in oil-exporting countries with flexible regimes is influenced by monetary authority interventions. Thus, we identify three structural oil price shocks, and we estimate pooled OLS regressions for a panel of 27 oil-exporting economies. The results show that economies with higher international reserve accumulation experience lower exchange rate appreciation during oil-specific demand shocks.

The impact of fluctuating international fertiliser prices and exchange rates on domestic fertiliser prices in Türkiye

The impact of fluctuating international fertiliser prices and exchange rates on domestic fertiliser prices in Türkiye

The factor structure of exchange rates volatility: global and intermittent factors

In this paper, we consider a fractionally integrated multi-level dynamic factor model (FI-ML-DFM) to represent commonalities in the hourly evolution of realized volatilities of several international exchange rates. The FI-ML-DFM assumes common global factors active during the 24 h of the day, accompanied by intermittent factors, which are active at mutually exclusive times. We propose determining the number of global factors using a distance among the intermittent loadings. We show that although the bulk of common dynamics of exchange rates realized volatilities can be attributed to global factors, there are non-negligible effects of intermittent factors. The effect of the COVID-19 on the realized volatility comovements is stronger on the first global-in-time factor, which shows a permanent increase in the level. The effects on the second global factor and on the intermittent factors active when the EU, UK and US markets are operating are transitory lasting for approximately a year after the pandemic starts. Finally, there seems to be no effect of the pandemic neither on the third global factor nor on the intermittent factor active when the markets in Asia are operating.

International trade and exchange rate during war: a retrospective review

International trade and exchange rate during war: a retrospective review

Confirming the Receipts of International Tourism in Indonesia after the COVID-19 Pandemic: Analyzed with Macroeconomic Indicators

This study aims to analyze International Tourism Receipts in Indonesia with the variables of International Trade, Inflation, and Exchange Rates during and after the COVID-19 pandemic. The analysis technique used to answer the problem is regression analysis using the Ordinary Least Squares (OLS) method. This type of research data uses secondary data obtained from the World Bank, Central Statistics Agency, and Bank Indonesia during the 2002-2022 period. The results of research analysis show that 1) the International Trade variable has a significant negative effect on International Tourism Receipts in Indonesia during and after the COVID-19 pandemic. The stability of international trade fluctuates, tends to decrease, but after the COVID-19 pandemic and the relaxation of social distancing policies, there has been an increase in international tourism. 2) The Inflation variable has a significant negative effect on International Tourism Receipts in Indonesia. A higher inflation rate increases living and travel costs, then reduces tourist interest. 3) The exchange rate variable has a significant and positive effect toward international tourism receipts. The increase of dollar exchange rate against the rupiah, will increase tourist interest in Indonesia. The implications of the results of this research are important for stakeholders and tourism sector companies so that they can continuously increase International Tourism Receipts in Indonesia through keeping macroeconomic indicators consisting of International Trade, Inflation and Exchange in Indonesia.

Connectedness and spillover between African equity, commodity, foreign exchange and cryptocurrency markets during the COVID-19 and Russia-Ukraine conflict

Since the onset of the COVID-19 pandemic, financial and commodity markets have exhibited significant volatility and displayed fat tail properties, deviating from the normal probability curve. The recent Russia-Ukraine war has further disrupted these markets, attracting considerable attention from both researchers and practitioners due to the occurrence of consecutive black swan events within a short timeframe. In this study, we utilized the Quantile-VAR technique to examine the interconnectedness and spillover effects between African equity markets and international financial/commodity assets. Daily data spanning from January 3, 2020, to September 6, 2022, was analyzed to capture tail risks. Our main findings can be summarized as follows. Firstly, the level of connectedness in returns is more pronounced in the lower and upper tails compared to the median. Secondly, during times of crisis, African equity markets primarily serve as recipients of systemic shocks. Lastly, assets such as Silver, Gold, and Natural Gas exhibit greater resilience to systemic shocks, validating their suitability as hedging instruments for African equities, in contrast to cryptocurrencies and international exchange rates. These findings carry significant implications for policymakers and investors in Africa equities.

Estimating the effect of international crude oil prices on RMB exchange rate with two-way fluctuation spillover.

International crude oil prices has become one of the important factors that affect exchange rate fluctuation. By combining TVP-VAR model and DY time-varying spillover index, this paper measures the two-way fluctuation spillover effect between international crude oil prices and RMB exchange rate from 2011 to 2022. The research results show that: (1) There are obvious time-varying characteristics among international crude oil prices, onshore RMB exchange rate and offshore RMB exchange rate, and they are strengthened when major events occur at home and abroad; (2) The spillover and absorption level among international crude oil prices, onshore RMB exchange rate and offshore RMB exchange rate is relatively limited; (3) After the "exchange rate reform on August 11", the market participation of RMB exchange rate has increased year by year, and the offshore RMB is mainly net spillover, while the onshore RMB is mainly reflected as a recipient; (4) The offshore RMB exchange rate has a driving effect on the onshore RMB exchange rate. Based on this, it is necessary to orderly promote the development and utilization of new energy, actively promote the market-oriented reform of RMB exchange rate, play the leading role of offshore market, and accelerate the construction of crude oil-RMB settlement system.

THE IMPACT OF EXTERNAL FACTORS ON THE PROCESSES OF TRANSFORMATION OF BANKS IN THE CONTEXT OF THE DIGITAL ECONOMY

This article considers the issues of forming new standards in banking business based on the factors of liberalization of foreign economic relations, capital and production transnationalization, which affect the processes of transformation of commercial banks in the conditions of the digital economy. The information revolution is creating additional risks for banks through international business and exchange rates. Today, banks are faced with completely new phenomena and tasks such as data processing under the influence of "Big data", the emergence of new participants in the financial market, all this leads to an increase in the risks of commercial banks in the market, and this, in turn, requires the transformation of banks' activities is doing.