The Dominant Currency Financing Channel Of External Adjustment
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The Dominant Currency Financing Channel Of External Adjustment
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Author : Camila Casas
language : en
Publisher: International Monetary Fund
Release Date : 2023-08-11
The Dominant Currency Financing Channel Of External Adjustment written by Camila Casas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-08-11 with Business & Economics categories.
We provide evidence of a new channel through which exchange rates affect trade. Using a novel identification strategy that exploits firms’ maturity structure of foreign currency debt around a large depreciation in Colombia, we show that firms experiencing a stronger debt revaluation of dominant currency debt due to a home currency depreciation compress imports relatively more while exports are unaffected. Dominant currency financing does not lead to an import compression for firms that export, hold foreign currency assets, or are active in the foreign exchange derivatives markets, as they are all hedged against a revaluation of their debt. These findings can be rationalized through the prism of a model with costly state verification and foreign currency borrowing. Quantitatively, the dominant currency financing channel explains a significant part of the external adjustment process in addition to the expenditure switching channel. Pricing exports in the dominant currency, instead of the producer’s currency, mutes the effect of dominant currency financing on trade flows.
Dominant Currencies And External Adjustment
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Author : Gustavo Adler
language : en
Publisher: International Monetary Fund
Release Date : 2020-07-20
Dominant Currencies And External Adjustment written by Gustavo Adler and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-07-20 with Business & Economics categories.
The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.
Currencies Of External Balance Sheets
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Author : Mr. Cian Allen
language : en
Publisher: International Monetary Fund
Release Date : 2023-11-17
Currencies Of External Balance Sheets written by Mr. Cian Allen and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-11-17 with Business & Economics categories.
This paper assembles a comprehensive dataset of the currency composition of countries’ external balance sheets for 50 economies over the period 1990–2020. We document the following findings: (i) the US dollar and the euro still dominate global external balance sheets; (ii) there were striking changes in the currency composition across countries since the 1990s, with many emerging markets having moved from short to long positions in foreign currency, thus moving away from the so-called “original sin”; (iii) financial and tradeweighted exchange rates are weakly correlated, suggesting the commonly used trade indices do not adequately reflect the wealth effects of currency movements, and (iv) the large wealth transfers across countries during COVID-19 and the global financial crises increased global imbalances in the former, and reduced them in the latter.
Research Handbook Of Financial Markets
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Author : Refet S. Gürkaynak
language : en
Publisher: Edward Elgar Publishing
Release Date : 2023-05-09
Research Handbook Of Financial Markets written by Refet S. Gürkaynak and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-05-09 with Business & Economics categories.
The Research Handbook of Financial Markets carefully discusses the histories and current states of the most important financial markets and institutions, as well as explicitly underscoring open questions that need study. By describing the institutional structure of different markets and highlighting recent changes within them, it accurately highlights their evolving nature.
Geopolitical Risk Sustainability And Cross Border Spillovers In Emerging Markets Volume Ii
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Author : Michael I. C. Nwogugu
language : en
Publisher: Springer Nature
Release Date : 2022-01-01
Geopolitical Risk Sustainability And Cross Border Spillovers In Emerging Markets Volume Ii written by Michael I. C. Nwogugu and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-01-01 with Business & Economics categories.
Many emerging market countries are bank-based economies and are increasingly affected by geopolitical risks, U.S. dollar dynamics, regulations, preferential trade agreements (PTAs), MNCs (that often function like international organizations), social networks, labor dynamics, cross-border spillovers and the inefficient expansion of formal/informal microfinance. Country risks, informal economies (that account for 20-50 percent of the national economy of many emerging market countries), investor protection, enforcement commitment, compliance costs, sustainability (environmental, social, economic and political sustainability), economic growth, political stability, financial stability, geopolitical risk, social networks, household economics, inequality and international trade outcomes can vary dramatically across many DECs and LDECs due to these phenomena. The COVID-19 pandemic has illustrated the many problems inherent in political systems, economic policy and governments’ emergency powers during pandemics/epidemics and economic/financial crisis. This second volume focuses on geopolitical risks that are intertwined with constitutional political economy and labor issues, alongside addressing some of the financial and constitutional crises that occurred in Europe, Asia and the U.S. during 2007-2020. This book provides analysis of complex systems and the preferences and reasoning of state/government and corporate actors in order to develop better artificial intelligence and decision-system models of geopolitical risk, public policy and international capital flows, all of which are increasingly important decision factors for investment managers, boards-of-directors and government officials.
Foreign Currency Bank Funding And Global Factors
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Author : Signe Krogstrup
language : en
Publisher: International Monetary Fund
Release Date : 2018-05-09
Foreign Currency Bank Funding And Global Factors written by Signe Krogstrup and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-09 with Business & Economics categories.
The literature on the drivers of capital flows stresses the prominent role of global financial factors. Recent empirical work, however, highlights how this role varies across countries and time, and this heterogeneity is not well understood. We revisit this question by focusing on financial intermediaries’ funding flows in different currencies. A concise portfolio model shows that the sign and magnitude of the response of foreign currency funding flows to global risk factors depend on the financial intermediary’s pre-existing currency exposure. An analysis of a rich dataset of European banks’ aggregate balance sheets lends support to the model predictions, especially in countries outside the euro area.
Asian Economic Integration Report 2024
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Author : Asian Development Bank
language : en
Publisher: Asian Development Bank
Release Date : 2024-02-01
Asian Economic Integration Report 2024 written by Asian Development Bank and has been published by Asian Development Bank this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-02-01 with Business & Economics categories.
This report explores how economic forces are affecting cross-border flows of goods and services and the movement of people in Asia and the Pacific. It looks at the extent to which various challenges are prompting deeper economic links. This year’s theme chapter focuses on decarbonizing global value chains, exploring how policymakers can minimize emissions while maximizing the economic advantages of global production networks. It evaluates the impact of initiatives like the European Union’s Carbon Border Adjustment Mechanism for Asian subregions, suggesting the use of carbon pricing, accounting mechanisms for embedded emissions, increased trade cooperation, upgraded technology, and international cooperation for technology transfer to reduce CO2 emissions.
The External Balance Assessment Eba Methodology
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Author : Mr.Steven Phillips
language : en
Publisher: International Monetary Fund
Release Date : 2014-01-13
The External Balance Assessment Eba Methodology written by Mr.Steven Phillips and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-01-13 with Business & Economics categories.
The External Balance Assessment (EBA) methodology has been developed by the IMF’s Research Department as a successor to the CGER methodology for assessing current accounts and exchange rates in a multilaterally consistent manner. Compared to other approaches, EBA emphasizes distinguishing between the positive empirical analysis and the normative assessment of current accounts and exchange rates, and highlights the roles of policies and policy distortions. This paper provides a comprehensive description and discussion of the 2013 version (“2.0”) of the EBA methodology, including areas for its further development.
External Debt Statistics
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2003-06-25
External Debt Statistics written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-06-25 with Business & Economics categories.
This Guide provides clear, up-to-date guidance on the concepts, definitions, and classifications of the gross external debt of the public and private sectors, and on the sources, compilation techniques, and analytical uses of these data. The Guide supersedes the previous international guidance on external debt statistics available in External Debt: Definition, Statistical Coverage, and Methodology (known as the Gray Book), 1988. The Guides conceptual framework derives from the System of National Accounts 1993 and the fifth edition of the IMFs Balance of Payments Manual(1993). Preparation of the Guide was undertaken by an Inter-Agency Task Force on Finance Statistics, chaired by the IMF and involving representatives from the BIS, the Commonwealth Secretariat, the European Central Bank, Eurostat, the OECD, the Paris Club Secretariat, UNCTAD, and the World Bank.
Market Volatility And Foreign Exchange Intervention In Emes
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Author : Banco de Pagos Internacionales (Basilea, Suiza). Departamento Monetario y Económico
language : es
Publisher:
Release Date : 2013
Market Volatility And Foreign Exchange Intervention In Emes written by Banco de Pagos Internacionales (Basilea, Suiza). Departamento Monetario y Económico and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Banks and banking, Central categories.