National Exchange Rate Research Articles

The Impact of RMB Exchange Rate Fluctuation on China's Air Conditioning Industry

Based on the background of China's current trade with other countries is becoming increasingly close, the study of exchange rate stability on the impact of China's trade with other countries to promote China's economic stability has a certain theoretical significance. In the study of air conditioning industry import and export trade factors affecting the attention of the national exchange rate is very important, in the two countries trade relations, the exchange rate is a measure of the two countries to buy, sell the price of the product of the vital factors, exchange rate changes for the enterprise will bring a certain degree of impact, stabilization of the exchange rate for the promotion of our country and the trade of other countries in the long term and good cooperation has important practical significance. The air-conditioning manufacturing industry is a very representative research object. The cost-sensitive home appliance industry is a labor-intensive industry, which provides a huge number of jobs for China and creates a huge amount of foreign exchange income. At the same time, the home appliance industry, as a representative of China's manufacturing industry, faces industrial upgrading pressure and is in the maturity of a fully competitive industry, which has been severely impacted by exchange rate changes. It is of great significance to correctly measure and analyze the foreign exchange risk exposure of the import and export of the air-conditioning industry and its influencing factors. From a micro point of view, enterprises can be based on foreign exchange risk exposure situation targeted adjustment of financial strategies, strategies and management methods. From a macro point of view, the country can be based on the overall foreign exchange risk exposure characteristics of home appliances to formulate the correct macroeconomic policy.

FIXED MONETARY REGIMES – DEBATES AND ARGUMENTS (Continued)

The article elaborates material published earlier in the journal (Fixed Monetary Regimes – Debates and Arguments // International Trade and Trade Policy, 2023, Vol. 9, N 1 (33), pp. 23–35). The second part of the article examines the features of specific manifestations of types of institutional decisions within the framework of fixed exchange rates. The main problems arising in the coordination of independent national exchange rates are presented. Four institutional and organizational solutions to coordination problems are described in detail, namely: short-term capital movement control, currency management and unilateral dollarization (euroization), as well as a clearing union. The advantages and disadvantages of these solutions are discussed.

The impact of oil and natural gas prices on overnight risk in exchange rates based on the MVMQ-CAViaR models

Existing research has not yet studied the impact of oil and gas prices on the overnight risk in exchange rates. This paper examines the impact of oil and natural gas prices on the overnight risk in the RMB, HKD, and Yen. An MVMQ-CAViaR model of multiple markets and an MVMQ-CAViaR model of combined influence are proposed to measure the impact of oil and natural gas prices on the overnight risk in the Yen, HKD, and RMB from 2013 to 2019. The empirical results show that the overnight risk in the RMB, HKD, and Yen are impacted by lagged risk and that the RMB suffer from the largest risks. The three exchange rates' overnight risks are impacted by the risk in oil prices and natural gas prices. However, the Yen suffers from the largest risk, and the HKD suffers from the smallest risk. This shows the fragility of Japan's energy sector and its extreme dependence on energy imports. This shows that the energy sector has little impact on the Hong Kong economy, which is dominated by finance and trading. The two industries of trading and finance do not require much energy. The impact of natural gas price risks on the overnight risk in the RMB, HKD, and Yen is smaller than that of oil price risks. All overnight risks are affected by the combined influence of oil prices and natural gas prices. The Yen exchange rate suffers from the greatest influence relative to the HKD exchange rate and RMB exchange rate. Thus, when oil prices and natural gas prices fall at the same time, more attention should be paid to the effect of their combined influence on national exchange rates. Financial regulators need to be ready for exchange rate fluctuations. The MVMQ-CAViaR model of combined influence is more accurate than the MVMQ-CAViaR model of multiple markets, especially at the 1% significance level and for HKD, and the MVMQ-CAViaR model of combined influence produces better estimates.

Current Aspects of Inflation Dynamics in the City of Sevastopol

Periodicals of economic literature thoroughly described the influence on inflation exerted by fluctuations of the national exchange rate and other external factors, which become apparent in imported inflation. The article analyzes and estimates the most important factors stimulating inflation in the city of Sevastopol. As the information base the authors used data of budget administration in Sevastopol in 2016–2020, official statistics and information of the Bank of Russia, as well as works by economists. This analysis helps identify factors exerting steady long-term influence on annual figures of inflation showing key trends in price dynamics in the region. Researching causes of negative impact on inflation processes takes into account the budget channel of regional economy financing, including through social benefits to people, retail crediting and other factors. The method of correlation analysis gives an opportunity to identify the most important acute pro-inflation factors. The findings can be used as extra information to forecast inflation processes in the region with regard to the impact of steady factors, which could improve the quality of forecast and provide price stability in the region.

REFINANCING RATE AND ITS IMPACT ON THE COUNTRY'S ECONOMY IN THE CONTEXT OF THE COVID PANDEMIC

REFINANCING RATE AND ITS IMPACT ON THE COUNTRY'S ECONOMY IN THE CONTEXT OF THE COVID PANDEMIC

Globalization and sovereignization in the light new theory of money

Recently, both in publicistic speeches and in scientific works, globalization is almost always considered in opposite aspects: either as an extremely positive strategy that allows countries to embark on the path of progressive development, or, on the contrary, prevents it. In fact, globalization itself does not lead to either negative or positive consequences, since it is an objective economic law, i.e. a law that operates independently of the will and consciousness of people. And these people either know how to use its results for the benefit of the country’s development, or not. Hence, the task of understanding the mechanisms and practices of globalization becomes urgent, first of all, by the leaders of the country’s economic bloc. But without relying on the laws of monetary circulation, which are directly related and affect the processes of globalization, it will be impossible to preserve and strengthen the sovereignty of the country, which was the subject of this work. Based on the study, it was shown that Russia and other countries can become truly sovereign states if they abandon payments in dollars and switch to digital national currencies and discrete exchange rates (DCR), and the activities of exchanges will be focused on the national economy in accordance with the laws monetary circulation.

ДОЛГОВАЯ ЭКОНОМИКА США

The article examines the US budget policy, reveals the reasons for the growth of public debt. It is emphasized that, despite the annual persistence of the budget imbalance and the ever-growing public debt, the US economy is gradually emerging from the crisis caused by COVID19. The impossibility of a default in the United States with a very significant public debt can be explained by the peculiarity of the effective mechanism of the US Federal Reserve for the implementation of monetary policy. The financial regulator can issue dollars at any time by buying government bonds. In other words, the United States has the ability to borrow money and repay it in the national currency. The US economic policy is increasingly influenced by the Fed by changing the volume of the money supply through transactions with Treasury bonds. In recent years, there has been a weakening of interest on the part of foreign investors in the acquisition of US debt securities. The presence on the US debt market of such leading financial players as China, OPEC countries, Russia has decreased. This is largely due to geopolitical factors, the situation on the world oil market, and fluctuations in national exchange rates. It is concluded that the influence of the Fed on the economic processes taking place in the current conditions of the development of the world economy is growing.

Gold production in the Russian Federation: The analysis and forecast

Subject. The article discusses possible lines for improving the methodological framework of the long-term economic forecast of gold production in the Russian Federation, relying upon the mathematical apparatus of econometric models. Objectives. We devise an economic-mathematical model for predicting the gold production with respect to the specifics of the economic development in Russia’s gold mining industry. Methods. The study is based in the correlation and regression methods for analyzing publicly available statistical data on the gold market. The least square method is taken as the methodological approach to designing the economic-mathematical model for forecasting. Results. Each gold deposit is found to be distinctive, having its own qualities, which seriously differ from those of other gold deposit. As a result of the analysis, we discovered key factors, which significantly influence the gold production, such as demand and price for gold, the amount and quality of geological reserves of gold, the amount of investment to be made in geological prospecting, national exchange rate and key rate of the Bank of Russia. We substantiated the use of the linear three-factor model, which involves gold production volumes in Russia, demand for gold, national exchange rate and price for gold as regressors. According to our estimates, in the Russian Federation, gold production will have reached 370–380 tons by 2025. Conclusions. Based on the least square method, the structural forecast apparatus does not account for geological and geographic-economic distinctions of gold deposits due to their unique nature. Therefore, determining regressors for the model, we predominantly focuses on open access data.

ДЕПОЗИТНА ПОЛІТИКА БАНКІВ УКРАЇНИ В УМОВАХ ПАНДЕМІЇ COVID-2019

Анотація. Пандемія COVID-2019 стала неочікуваним викликом для економік багатьох країн. Для уникнення швидкого розповсюдження хвороби уряди більшості країн вводили карантин, вимушено закривали кордони, установлювали обмеження на пересування населення тощо. Очевидно, що це провокувало нестабільність на фінансових ринках, різкі коливання курсів національних валют і погіршувало економічні очікування населення. Проведено дослідження депозитної політики банків України в умовах економічної нестабільності, що була спровокована пандемією COVID-2019. На основі статистичних даних проаналізовано структуру депозитних вкладень юридичних і фізичних осіб, динаміку процентних ставок, регіональний розподіл депозитів, а також визначено банків-лідерів із залучення грошових коштів. Отримано неочікувані висновки щодо незначного впливу пандемії на ринок депозитів. Попри всі негативні прогнози, в Україні не спостерігалося значного відпливу депозитів, радше навпаки — банки змогли наростити обсяги залучених коштів від фізичних і юридичних осіб. Проте негативні очікування населення відбилися на структурі депозитних ресурсів, зокрема в аналізований період значно зросла частка коштів на вимогу і короткострокових депозитів. На основі аналізу думок експертів, а також прогнозу основних економічних показників, що мають вплив на ринок депозитів, було розроблено й обґрунтовано три сценарії подальшого розвитку економіки України та банківського сектору — оптимістичний, критичний і реалістичний. На думку авторів, найбільш обґрунтованим у цих умовах може стати реалістичний сценарій, який передбачатиме позитивну динаміку у зростанні базових економічних показників, що впливатиме на зростання обсягів депозитних ресурсів у банках, водночас ураховуватиме потенційні ризики неекономічного характеру, що можуть дестабілізувати ситуацію. Отримані висновки можуть бути застосовані при розробленні стратегій розвитку як окремих банків, так і банківської системи загалом. Ключові слова: депозити, депозитна політика банків, пандемія, фінансові ресурси, банки, фінансові ризики. Формул: 0; рис.: 4; табл.: 4; бібл.: 13.

Real Effective Exchange Rate and Industrial Productivity in Croatia: Wavelet Coherence Analysis

Abstract This paper brings releationship between real effective exchange rate and industry production in Croatia. Research sample consists of monthly data from January 2000 up to June 2019. Following wavelet coherence approach, empirical results reveal the relationship across time and frequency domain. The empirical obtained from wavelet coherence analysis and confirmed with conventional correlation analysis suggested positive relationship between industrial productivity and real effective exchange rate in Croatia, with depreciation as a factor of positive influence on industrial productivity. Research results provided in the paper also contributes to the debate on exchange rate policy in Croatia, extending the discussion on national exchange rate policy implications.

An Analysis on Forecasting Inflation Rate in the Philippines: A Recurrent Neural Network Method Approach

Inflation rate is the proceeding rise within the common level of costs of products and services in an economy over a certain span of time. In 2018, the Philippines has the highest inflation rate among the 10 South East Asian countries. The objective of this research is to forecast the inflation rate of the Philippines for the next five years (2019-2023). Also, the researchers compared the results obtained from the Multiple Linear Regression and Recurrent Neural Network (RNN) performed in MATLAB to determine which of these two models will be the better model in forecasting inflation rate. In this study, the researchers observed the behavior of the Inflation Rate(y) and its economic factors such as Import (x1), Export (x2), Money Supply (x3), Gross Domestic Product (x4), Gross National Product (x5), Expenditure (x6) and Exchange Rate (x7). Using Multiple Linear Regression, this study determined that the significant predictors are Money Supply (x3) and Expenditures (x6). By evaluating the forecast efficiency of the two methods, the researchers concluded that Multilayered Recurrent Neural Network outperforms Multiple Linear Regression in predicting inflation rate of the Philippines. This paper can be useful to the Philippine Government on their decisions about monetary policy making since forecasting the inflation rate has a huge importance and impact in conducting monetary policy.

The substance of the contemporary Central Bank of the Russian Federation

Subject. The article focuses on the substance of the Central Bank of the Russian Federation. Objectives. The study analyzes trends in aggregated financial and economic indicators of today’s Russia, and reveals the substance of the Central Bank. Methods. The study is based on the systems approach and methods of statistical, neural network and cluster analysis. Results. I demonstrate the positioning of the Central Bank and its function. The Central Bank was found to depend on the market, being, on the one hand, its vehicle, and, on the other hand, its product (as part of monetary relations). Therefore, the substance of the Central Bank shows up in the monetary relations. The article illustrates the substance of the Central Bank, which is to ensure the stable growth in the accounting balance notwithstanding a drop in the national exchange rate, finance the cash ratio, maintain a growth in the interbank interest rate and yield on government bonds. The above functions shape the monetary relations. The official inflation targeting policy of the Central Bank should be viewed through the real effective exchange rate. Conclusions and Relevance. Understanding the contemporary substance of the Central Bank unveils the mechanism of monetary relations and opportunities for maintaining the stability of the Russian capitalism within the dynamics of aggregated financial and economic indicators. The findings contribute to the existing knowledge and advance the competence of public authorities to make administrative decisions on the regulatory responsibility of the Central Bank of the Russian Federation for its performance.

МОДЕЛЮВАННЯ ДИНАМІКИ ПОКАЗНИКІВ ФІНАНСОВОЇ СИСТЕМИ УКРАЇНИ

The article examines the main factors influencing the stability and strength of the financial system of Ukraine during 2007-2020 . In result of the conducted researches, the use of the dynamic economic-mathematical model for the analysis of financial indicators and definition of each factor is offered. The negative effects of economic crises of recent years, fluctuations in the national exchange rate, bankruptcy of banks and other financial institutions, volatility of financial markets indicate instability and unpredictability of economic processes and do not increase the investment attractiveness of our country. Falling demand for metallurgical products, hryvnia devaluation, capital outflows and price instability caused the financial and economic crisis of 2008-2009, which showed the system imperfection and the inability to monitor financial stability. Ineffective public policy and the inability to assess potential threats exacerbated the crisis in early 2014. The COVID-19 pandemic caused a new global crisis in 2020, which resulting in the collapse of Ukraine's economy. The country's economy fell by almost 12% in the second quarter of 2020. Since Ukraine is negatively affected by economic crises, there is a need to model financial indicators and forecast their changes under the influence of internal and external factors. The stability of the Ukraine financial system on the basis of a vector autoregressive model construction for the period from 2007 to 2021 is analyzed. As a result of the conducted researches, the vector autoregressive model (VAR) was confirmed by the optimal specification of time series, and the significant influence of each factor was determined. The negative effects of the economic crises of 2008-2009, 2014, and 2020 on the state economy are analyzed. It was found that Ukraine gradually began to emerge from the global economic crisis in 2020, caused by the pandemic COVID-19. In order to ensure financial stability and strength of the economy, it is important to forecast and predict external and internal threats, as well as the gradual strengthening of financial indicators.

ASSESSING THE ENERGY SUBSIDY REFORM IN INDONESIA THROUGH DIFFERENT SCENARIOS

This paper provides a comprehensive study on energy subsidy reform simulations in Indonesia by employing two new approaches, namely, the Almost-Ideal Demand System Iterated Linear Least-Square and SUBSIM. Periods of low and high oil prices are also accounted in this paper; further, it reveals that in 1999, when oil prices were low, this reform was possible due to Indonesia’s status as a net oil exporter and precise selected-reformed energy goods; however, the major concerns were the unsupporting welfare situations and the depreciation of the rupiah after the Asian Financial Crisis in 1997. In 2012, the evidence shows that despite high oil prices and Indonesia being a net oil importer, this reform saved more for the government and made significant welfare impacts. Overall, this paper suggests that this reform is feasible when at least some factors, i.e., stable national exchange rate, conducive welfare situations, availability of potential recipients’ database, and functioning government, are well-established. Keywords : Almost-Ideal Demand System; Energy goods; Simulation; Subsidy reform; Indonesia. JEL Classifications: D12, H53, I38, Q48 DOI: https://doi.org/10.32479/ijeep.9223

The mortgage crediting as perspective direction of the development of bank investments in Ukraine

The essence of the mortgage, the modern state of mortgage lending in Ukraine in terms of the currency of lending, the term of lending and the borrowers are examined and analyzed in the article. The structure of the bank mortgage crediting is investigational, the influence of the factors, related to the consequences of economic crisis, instability of currency national exchange rate, dilutive expectations of population, is determined. The attention is focused on the mortgage loans given to households in terms of currencies.The tendencies of the mortgage crediting in the banking system in modern terms and their negative influence on the economy of the state and on banking sector are described. The problems that hinder intensive development of mortgage lending in Ukraine are defined.

The role of the macroeconomic environment in shaping capital market co-movement in C.E.E. countries

This article revisits the relationship between the contagion and co-movement of 10 Central and Eastern European (C.E.E.) financial markets in relation to two major Western European capital markets using wavelet-based methodology. Based upon an A.R.D.L. panel model we found that foreign monetary policy, national exchange rate and economic cycle play a key role in both short- and long-term co-movement between capital markets. While a stable economic environment coupled with a strong national currency can reduce the degree of short-term co-movement between capital markets, changes in foreign monetary policy could increase the effect of external shocks. Furthermore, we find that inflation, foreign exchange rate and foreign economic cycle play an important role after longer periods. By ensuring a stable economic environment national authorities can help mitigate the effects of external shocks on national capital markets.

External influence on exchange rates: An empirical investigation of US pressure and the Chinese RMB

Trade imbalances have often led to accusations of ‘currency manipulation’ and efforts to remedy the purported effects of exchange rate misalignment. This paper investigates the impact of US pressure on China to revalue the RMB. Using vector autoregression (VAR) to analyze an original dataset of US statements and actions between 2005 and 2012, we examine the over-time dynamics between US pressure and the nominal RMB/USD exchange rate. A case study of mounting US pressure in advance of the 2010 midterm election illustrates China’s responsiveness in timing adjustments in the RMB to defuse the risk of an international confrontation. Our findings indicate that external political pressures can influence national exchange rate policies under certain conditions.

External Influence on Exchange Rates: An Empirical Investigation of US Pressure and the Chinese RMB

Trade imbalances have often led to accusations of “currency manipulation” and efforts to remedy the purported effects of exchange rate misalignment. This paper investigates the impact of US pressure on China to revalue the RMB. Using vector autoregression (VAR) to analyze an original dataset of US statements and actions between 2005 and 2012, we examine the over-time dynamics between US pressure and the nominal RMB/USD exchange rate. A case study of mounting US pressure in advance of the 2010 midterm election illustrates China’s responsiveness in timing adjustments in the RMB to defuse the risk of an international confrontation. Our findings indicate that external political pressures can influence national exchange rate policies under certain conditions.

The Logic of the Euro, Its Institutional Architecture and the Related Implications

<p><em>The Euro is the logical consequences of the European common market according to the principle ‘one market, one money’, to avoid unfair competitionchanging internal monetary parities. Anyhow it is a necessary but insufficient condition being the institutional architecture weak. The European Central Bank cannot perform as the other main central banks: cannot act as lender of last resort or intervene on the exchange market to counteract speculation; the risks on national exchange rates has been transferred to member-countries sovereign debts withouta non-deflationary solution to reenter the excesses in theagreed ratio on GDP. The Eurozone is a non-optimal currency area without a policy Mundell’s type. The suggested solutionsby the Europeans are to reform national labor markets and public bureaucracies, and by the idealists to create a political union.</em></p>

The Logic of the Euro, Its Institutional Architecture and the Related Implications

<p><em>The Euro is the logical consequences of the European common market according to the principle ‘one market, one money’, to avoid unfair competitionchanging internal monetary parities. Anyhow it is a necessary but insufficient condition being the institutional architecture weak. The European Central Bank cannot perform as the other main central banks: cannot act as lender of last resort or intervene on the exchange market to counteract speculation; the risks on national exchange rates has been transferred to member-countries sovereign debts withouta non-deflationary solution to reenter the excesses in theagreed ratio on GDP. The Eurozone is a non-optimal currency area without a policy Mundell’s type. The suggested solutionsby the Europeans are to reform national labor markets and public bureaucracies, and by the idealists to create a political union.</em></p>