Exchange Rate Variability Research Articles

PENGARUH KURS, CADANGAN DEVISA DAN PRODUKSI TERHADAP EKSPOR KARET ALAM DI INDONESIA

This study aims to determine the influence of exchange rates, foreign exchange reserves, and production on natural rubber exports in Indonesia. The data used is secondary data in the form of a time series from 1971-2021 obtained from the World Bank and FAO (Food and Agriculture Organization). Previous findings have examined exchange rates, foreign exchange reserves, production, and general exports using different commodities. At the same time, this study specializes in exchange rates, foreign exchange reserves, and production associated with natural rubber exports in Indonesia. Data analysis uses the Vector Error Correction Model (VECM) approach, with all variables being stationary at the same level, i.e., differentiated in the first derivative. All variables must be co-integrated and have a negative ECT (Error Correction Term) value to make the model valid and usable. The results show that the exchange rate variable has a positive and insignificant effect in the short term. In contrast, in the long term, the exchange rate variable positively and significantly impacts natural rubber exports in Indonesia. The foreign exchange reserve variable positively and substantially affects natural rubber exports in Indonesia in the short term. In the long term, the foreign exchange reserve variable positively affects not significantly. Furthermore, production variables in the short term are insignificant, and in the long term, production variables have a positive but insignificant impact on natural rubber exports in Indonesia

New Dawn fades: Trade, labour and the Brexit exchange rate depreciation

This paper studies consequences of the large exchange rate depreciation occurring when the UK electorate unexpectedly voted to leave the European Union. Sterling plummeted, recording the biggest one-day depreciation of any of the world's four major currencies since Bretton Woods. The prospect of Brexit happening generated sizable differences in how much sterling depreciated against different currencies. Coupled with pre-referendum cross-country trade patterns, this generated variations in exchange rates facing businesses in different industries. The paper offers evidence of a cost shock from the prices of intermediate imports rising by more in higher depreciation industries, but with no revenue offset from exports. Workers were impacted by these increased cost pressures, not in terms of job loss but through relative real wage declines in higher depreciation, larger cost shock industries. This resulted in an aggregate fall in real wage growth of 3 to 3.6% cumulatively over the three years after the referendum.

Financial risk management in agriculture: mitigation strategies and protection against economic variables

This work explores essential strategies for managing financial and operational risks in the agricultural sector, a crucial pillar of the global economy, but one that is exposed to a wide range of financial risks. These risks include fluctuations in commodity prices, access to credit, operational risks, climate change, exchange rate variations, and government policies. To ensure the sustainability and profitability of agricultural operations, it is imperative that producers adopt effective financial risk management strategies. This article addresses the main mitigation and protection strategies against economic variables in the context of agriculture. The methodology of this study is based on a systematic literature review, focused on identifying, analyzing, and synthesizing financial risk management strategies in agriculture. The review covers the analysis of advanced precision technologies, which optimize agricultural production and reduce waste, as well as sustainable agricultural practices, adequate insurance to mitigate the impacts of climate risks, and commodity hedging. Strategies for diversifying crops and agricultural activities to distribute risk and improve financial resilience are also discussed. In conclusion, effective financial risk management in agriculture requires a multifaceted approach that integrates mitigation strategies for various types of risks. The adoption of advanced technologies, sustainable agricultural practices, adequate insurance, and a thorough understanding of market and policy dynamics are fundamental to strengthening resilience and ensuring the sustainability of the agricultural sector against adverse economic variables.

The asymmetric effects of exchange rate volatility on UK–Pakistan trade flows: New evidence from nonlinear ARDL approach

Using the nonlinear autoregressive distributed lag (NARDL) method, the current study explores the effects of exchange rate variations on commodities trade between Pakistan and the United Kingdom. The current study contends that the limiting assumption of symmetry between the exchange rate and the trade flows may have hampered the empirical results, despite the fact that earlier studies primarily used the symmetric cointegration approach. From 1980 to 2020, the study examines the symmetric and asymmetries effects of exchange rate variations on 35 sectors in Pakistan that import from the UK and 35 industries that export to the UK. The findings suggest that there is evidence of a considerable influence of asymmetric exchange rate variations on trade flows in both the short and long term in over half of the importing and exporting industries that participate in trade with the UK. By highlighting the significance of taking into account asymmetry in the analysis and exposing the sector-specific effects of exchange rate changes on trade flows, the study adds to the body of current work.

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.

Monetary Policy without Moving Interest Rates: The Fed Non-Yield Shock

Existing high-frequency monetary policy shocks explain surprisingly little variation in stock prices and exchange rates around FOMC announcements. Further, both of these asset classes display heightened volatility relative to non-announcement times. We use a heteroskedasticity-based procedure to estimate a “Fed non-yield shock”, which is orthogonal to yield changes and is identified from excess volatility in the S and P 500 and various dollar exchange rates. A positive non-yield shock raises stock prices in the U.S. and around the globe, and depreciates the dollar against all major currencies. The non-yield shock is essentially uncorrelated with previous monetary policy shocks and its effects are large in comparison. Its strong effects on the VIX and other risk-related measures point towards a dominant risk premium channel. We show that the non-yield shock can be related to Fed communications and that its existence has implications for the identification of structural monetary policy shocks.

Financial fragility, regime change, and monetary policy in an open economy – A model and empirical application to emerging market countries

July 20, 2023 (Revised April 15, 2024) The experiences of the 1997–98 Asian Financial Crisis and the 2008–09 Global Financial Crisis encouraged economists to develop new open-economy dynamic finance-macro models. Such models allow for nonlinearities -- to study the effects of contractionary currency devaluation -- in contrast to models of expansionary currency devaluation. The generic dynamic model of the finance-macro link in this paper includes the dynamics of the inflation rates, output gap, and financial variables (credit flows, risk premia, and exchange rates). The theoretical model with nonlinearities shows that there can be resilient or non-resilient outcomes of the dynamics. The level of resilience is however dependent on some empirical vulnerabilities. Relevant empirics show the risk premium is related not only to domestic real macro and financial variables, but also to the exchange rate and the foreign currency reserves. Econometrically, this paper explores the regime-dependent interaction of the output gap and financial variables in a two-regime non-linear Logistic Vector Smooth Transition Auto-Regressive (LVSTAR) model with a logistic-type transition function. This empirical study reveals that the financial variables of emerging economies show regime-dependent responses to external shocks. Therefore, a positive shock to the risk premia in a negative output gap regime entails an exchange rate depreciation, and accelerating contractions. Overall, however, a diversity of EM economies are examined in terms of their response to external shocks and their resilience levels. This research also has implications for international portfolio holdings.

Interannual variability of air-sea CO2 exchange in the Northern Yellow Sea and its underlying mechanisms

A three-dimensional (3-D) physical-biogeochemical-carbon cycle coupled model is used to investigate the interannual variability of the air-sea carbon dioxide (CO2) flux (FCO2) in the Northern Yellow Sea (NYS) from 2009 to 2018. The verification of the model indicate that the simulation results for multiple variables exhibit consistency and fit well with the observed data. The study show that although the multi-year average FCO2 in the NYS is close to the source-sink balance, there are obvious interannual differences between different years. In particular, a relatively strong source of atmospheric CO2 (1.0 mmol m–2 d–1) is exhibited in 2014, while a relatively strong sink of atmospheric CO2 (–0.7 mmol m–2 d–1) emerges in 2016. Mechanism analysis indicates that the abnormally high temperature is the main controlling factor for the relatively high CO2 efflux rate in the NYS in 2014, while the abnormally low dissolved inorganic carbon (DIC) concentration is the main factor contributing to the relatively high CO2 influx rate in 2016. Further analysis reveals that the primary reason for the low DIC concentration since the onset of winter in 2016 is the high net decrease rate of DIC in the NYS in 2015, influenced by net community production in the summer and advection processes during the autumn. The abnormally high primary production during the summer of 2015 results in the excessive reduction of DIC concentration through biological processes. In addition, due to the strong northeasterly wind event in November 2015, low-concentration-DIC water from the Yellow Sea (YS) extends into the Bohai Sea (BS). This further leads to higher DIC flux from the NYS into the BS in the upper mixed layer and increases the inflow of low-concentration-DIC water from the Southern Yellow Sea (SYS) into the NYS. These ultimately result in the abnormal reduction of DIC concentration in the upper mixed layer of the NYS during the autumn of 2015. This study enriches our understanding of interannual variability of FCO2 in the NYS, which will not only help to further reveal the variations of FCO2 under human activities and climate change, but also provide useful information for guiding the comprehensive assessment of the carbon budget.

The Effect of Inflation, Interest Rates and Exchange Rates on Company Value (Case Study on Registered Banking Institutions on the Indonesia Stock Exchange)

This research aims to determine the effect of inflation, interest rates and exchange rates on company value using data from the financial reports of companies listed on the Indonesia Stock Exchange for the 2019-2023 period. The type of data used is quantitative data. The data source used is secondary data. The analytical tool used in panel data linear regression is EViews version 10. Simultaneous research results of the variables Inflation, Interest Rates and Exchange Rates have no influence on Company Value. Meanwhile, in partial testing, the variables inflation, interest rates and exchange rates have no effect on company value in banking institutions listed on the Indonesian Stock Exchange for the 2019-2023 period

Analisis Pengaruh Nilai Tukar Rupiah, Jumlah Uang Beredar Dan Tingkat Inflasi Terhadap Pertumbuhan Ekonomi Di Indonesia

This study aims to find out and explain the analytical influence of the influence of the rupiah exchange rate, the amount of money in circulation and the inflation rate on economic growth in Indonesia. The type of research used by the researcher is quantitative research using secondary data. The data analysis techniques used include, multiple linear regression analysis, classical assumption test and hypothesis test using Eviews analysis tools. The results of the T test show that the exchange rate variable has a significant positive impact on Indonesia's economic growth, the money supply variable has a very large positive impact on Indonesia's economic growth, and the Inflation variable has a significant negative impact on Indonesia's economic growth. The results of the F test show that the exchange rate variable, the money supply variable, and the Inflation variable simultaneously have a significant effect on Indonesia's economic growth.

Paying with Money or Paying with Points: How Variable Versus Fixed Exchange Rates Influence Loyalty Point Redemption

Although research examining loyalty point redemption has focused almost exclusively on fixed exchange rates between points and money (e.g., 100 points = $1), variable exchange rates are observed frequently in practice (e.g., 100 points might equate to more or less than $1, depending on the monetary price and the required points for a flight redemption within the continental United States). Such variable rates are particularly common in loyalty programs in the hospitality industry. In this research, the authors show that the stability of the exchange rate—whether the exchange rate is fixed or variable across offers—systematically influences point redemption. Consumers are less likely to redeem loyalty points and instead spend money when they observe a variable exchange rate between money and points than when they observe a fixed exchange rate, even when the average value of points is the same. This effect is demonstrated in a series of studies across contexts, including an incentive-compatible retail loyalty program and a hotel loyalty program. The findings show that a variable point exchange rate induces more optimism than a fixed exchange rate, reducing point redemption. This effect is moderated by individual differences in optimism and by point expiration date. The authors conclude by discussing the implications for managers of loyalty programs and for consumers. This manuscript was submitted to JMR before Rebecca Hamilton’s appointment as Editor in Chief. The editor team that began the review process, Sachin Gupta and Vikas Mittal, finished the review process and final acceptance, per the AMA policy on submissions by journal editors.

Daily variability of estuary-shelf exchange at the Lagoa dos Patos’s mouth

The Lagoa dos Patos is one of the largest coastal lagoons in the world, covering an area of 10,000 km2, with a drainage basin of 200,000 km2, with an average river flow of around 5000 m3/s. The lagoon is of the choked type, and exchanges between the lagoon and the ocean occur through a narrow section with nealy 500 m wide. The hydrodynamics during periods of low river flow are mainly controlled by wind patterns, which can either favor the inflow or outflow of water from the lagoon. A field experiment was conducted to investigate the daily variability of lagoon-ocean exchanges during a period of low flow, fortuitously capturing an extreme condition with a 1 % probability. Flow and salinity data were monitored daily near the lagoon's mouth for one month (from February 23rd to March 23rd, 2020). Additionally, a hydrological balance was calculated using data on river flow from the lagoon's main tributaries (Guaíba river system, Rio Camaquã, and São Gonçalo Channel) and lagoon-atmosphere exchanges through precipitation and evaporation. The average results obtained from direct measurements (∼ 1000 m3/s) agree reasonably well with the data obtained from the hydrological balance (∼850 m3/s), especially considering the limitations of both approaches. It was identified that direct precipitation events over the lagoon can produce rapid responses in the freshwater outflow from the lagoon, often exceeding the values of river flow contribution.

PENGARUH NILAI TUKAR, PDB, DAN PEMBIAYAAN BANK SYARIAH TERHADAP EKSPOR KOPI DI INDONESIA

This research aims to determine the influence of exchange rate variables, Gross Domestic Product (GDP) and Sharia Financing on coffee exports in Indonesia. The method used in this research is a quantitative method, using timeseries (secondary) data with data collection techniques using documentation studies, namely by collecting data on Exports, GDP, Exchange Rates and Financing distributed by Sharia Banking obtained from the website of the Central Bureau of Statistics (BPS). ), Bank Indonesia (BI), Financial Services Authority (OJK) and ICO (International Coffee Organization). The data was then analyzed using the VECM (Vector Error Correction Model) method using Eviews 10 software. This shows that financing has an effect on the exchange rate which is significant in the long term but has no significant effect in the short term. Apart from that, based on the results of the impulse response analysis, it caused shocks but did not cause too much volatility in Indonesian coffee exports. The exchange rate has no effect on GDP, and GDP has no effect on financing. Then, based on the results of the variance decomposition analysis, it shows that the value of financing plays the biggest role in the exchange rate of Indonesian coffee exports. And it has a significant effect in the long term but does not have a significant effect in the short term on the volatility of Indonesian coffee exports.

Analisis Faktor–Faktor yang Mempengaruhi Impor Kapas di Indonesia

The purpose of this study is to determine and examine if cotton imports into Indonesia are influenced by cotton prices, cotton consumption, cotton production and exchange rate.. This study falls under the category of quantitative research. Data on cotton prices, cotton consumption, cotton production, exchange rate, and cotton imports make up this study population. The study sample consists of yearly data from Indonesia organized into timeseries that are consecutive and span the years 2003 through 2020. The secondary data documentation approach is the data gathering strategy used in this study. The analysis technique used is multiple linear regression analysis which meets the BLUE (Best Linear Unbiased Estimate) assumption. Based on the statistical t test results, the variable Cotton Prices (X1) 3,299 > ttable 2,160, Cotton Consumption (X2) = 6,398 > ttable 2,160, Cotton Production (X3) = 4,324 > ttable 2,160, and that the Exchange Rate (X4) = 3,128 > ttable 2,160 has an effect on Cotton Imports (Y) in Indonesia. The result of statistical testing indicates that H0 is rejected when Fcount > Ftable. The research found that although the four variables Cotton Prices (X1), Cotton Consumption (X2), Cotton Production (X3), and Exchange Rates (X4) had a simultaneous and limited influence on Imports of Cotton (Y), the Cotton Prices (X1) variable had the most impact.

Pengaruh Nilai Tukar Rupiah dan BI Rate Terhadap Harga Saham Sektor Basic Materials pada IDX MES BUMN 17 Periode 2021-2023

This research aims to test the rupiah exchange rate and BI Rate variables on basic materials sector stock prices on IDX MES in the long term and short term using the Vector Error Correction Model (VECM) analysis method in the Eviews 11 application. The data used is monthly in January 2021 -December 2023 sourced from Bank Indonesia and the Indonesian Stock Exchange. The results obtained are in accordance with the VECM test, the rupiah exchange rate variable in the short term and long term has a significant negative effect on stock prices, while the BI Rate variable in the short term and long term has no significant effect on stock prices. Based on the causality test, the rupiah exchange rate and BI There is no two-way causal relationship between rates and share prices.

Exchange Rate Regime Choices in Small Open Economies from Bretton Woods to Inflation Targeting

After centuries of metallic monies, for a long time, our understanding of fiat money had remained rudimentary and often controversial. Successive regimes eventually failed. The end of the Bretton Woods system marked the moment when the link between fiat money and gold was severed and when the possibility of letting exchange rates float became possible. The small open economies adopted various arrangements. Informed by these experiments, the understanding of monetary policy substantially progressed, leading to the widespread adoption of the expected inflation-targeting strategy with similar inflation targets. As a result, exchange rate variability has declined. The US dollar dominance was maintained and even increased. Yet, new challenges have emerged. The long period of interest rates stuck at the effective bound effectively suspended the use of the strategy. Then, during the post-pandemic surge in inflation rates, inflation forecasts became highly imprecise.

Factors Influencing the Competitiveness of Coffee Growers in Puebla, Mexico, to Export to the United States

This research aims to examine whether price, productivity, quality, innovation and technology transfer (TT), exchange rate, and financing are key factors that influence the export competitiveness of the coffee industry in the state of Puebla, Mexico. Previous studies on competitiveness have explored classical and neoclassical theories and new theories of international trade. We collected information by conducting an online survey using Google Forms, which included indicators for each of the variables studied. The multivariate regression model was employed to analyze the relationship between the dependent and independent variables, and we used the Statistical Package for the Social Sciences to process the data. The results indicated that the studied variables significantly affected coffee producers’ export competitiveness in Puebla. Specifically, the model’s exchange rate, quality, and productivity variables demonstrated considerable explanatory power. This underscored the importance of product quality, production volume, and factors related to the producer’s income in the decision to export coffee rather than sell it in the domestic market. Despite the emphasis placed on variables such as innovation and TT in the literature, they had limited relevance in the used model. However, we discussed several potential explanations for this outcome.

Exchange Rate Pass-Through and Inflation: Policy Insights for Vietnam Based on Comparative Analyses Across Asia

The exchange rate is a crucial macro indicator for any open economy, whereby any change in the rate would influence, to a certain extent, various socioeconomic facets. One of the significant impacts is revealed in the pass-through of exchange rate variations to price inflation, also known as the exchange rate pass-through (ERPT). This paper explores the effect of ERPT on domestic inflation in Vietnam by comparing with other Asian economies. Specifically, pass-through mechanisms are examined for every single price as well as a distribution chain from import price index (IMP), producer price index (PPI) to consumer price index (CPI). The empirical results show that exchange rate shocks positively influence the price changes in Vietnam as well as in other Asian countries. According to Cholesky decomposition, the exchange rate plays a limited role in regulating CPI movements. Besides, world commodity prices are found to have a significant impact on domestic inflation across the sample-countries. Our findings reveal profound implications for monetary policy management and price stability.

Monetary Policy, Digitalisation and Banking Industry Performance in Nigeria

In the evolving financial landscape of Nigeria, the interplay between monetary policy and digitalization significantly influences the performance metrics of banks. This study explores the multifaceted impact of these two critical factors on the Nigerian banking sector. Monetary policy, orchestrated by the Central Bank of Nigeria, regulates the economy's money supply, affecting banks' lending behaviors and liquidity. Digitalization, on the other hand, offers a transformative potential for banks to enhance operational efficiency, customer experience, and service delivery through technological advancements. The study examines how money supply, lending rate and digitalization (proxied by mobile cell subscription) affect banks’ financial performance, focusing on bank credit and liquid assets, while controlling for inflation and exchange rate variables. It also examines the interaction between digitalization and monetary policy variables on bank performance. Employing an interactive multiple regression model, the study analyzes time series data from 1996 to 2022 sourced from the World Bank. Findings indicate that while stringent monetary policies can constrain bank performance by tightening credit and reducing liquidity, digitalization provides an opportunity for banks to counteract these effects through enhanced efficiency. However, the successful integration of digital technologies is contingent upon adequate investment, regulatory support, and strategic alignment with the banks’ core objectives. The study concludes that Nigerian banks must adeptly manage monetary policy fluctuations and leverage digitalization to sustain and enhance performance. These insights could guide policy formulation and strategic decision-making within the banking industry.

Effect of Climate Change on Nigerian Economic Sustainability

Climate change is seen as a statistical variation that persists for an extended period, frequently for as long as a decade or more. Moreover, the issue of climate change which has gained global attention poses a serious threat to developing economy like Nigeria, which is characterized by widespread poverty as a result of economic instability. It is against this backdrop that this research is aimed at investigating the effect of climate change on Nigerian economic sustainability. The research made use of Autoregressive Distributive Lag (ARDL)/bond test approach and OLS estimation technique, while data for the period of 1990-2020 was collected. Changes in average temperature and carbon emission were used to capture climate change, while variation in exchange rate and agricultural production were used as control variables. The result of the analysis showed that the goodness-of-fit (R-Square) is 0.998. This means that 99.8% of the changes in the dependent variable (GDP) can be explained by the changes in the independent variables (CEM, AGRIC, EXR, TEMP). The annual speed of adjustment from short run to long run relationship is 34%. At F-statistic = 195.8052 and P value = 0.000, the model is statistically significant at 1% level. The results of the analysis further demonstrated that both in long-run and short-run, carbon emissions adversely affect Nigerian economic sustainability. Additionally, average atmospheric temperature was significantly related to sustainability of Nigerian economy in the short run. It was concluded that environmental stakeholders as well as Nigerian government should develop and enforce policies to reduce carbon emissions and forest depletion. Also, efforts should be made by government towards ensuring that policies that are environmentally friendly are made that can encourage agricultural production in order to reduce import of agricultural produce, thereby boosting economic growth.