Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price Boom

Wiegand, Johannes

doi:10.2139/ssrn.1266513

Cited by 3 publications

(2 citation statements)

References 11 publications

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“…Following the 1970s’ oil price hikes, US and some other Western banks were flush with liquidity as oil‐exporting countries deposited their growing dollar reserves with them. These banks encouraged Latin American and other developing country governments to borrow, offering them relatively low real interest rates in the face of high inflation (Wiegand, 2008). When the US Federal Reserve began raising interest rates from 1979 to check inflation, some other major central banks quickly followed.…”

Section: Replaying the 1980s?mentioning

confidence: 99%

Chronicles of Debt Crises Foretold

Chowdhury,

Sundaram

2023

Development and Change

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The debt crises looming in developing countries are being exacerbated by changing debt composition. Declining net foreign exchange earnings have worsened their predicament. As concessional development finance declined, many governments turned to riskier forms of borrowing from international capital markets. Concerted interest rate hikes are supposed to stem inflation; however, given that prices have mainly risen due to supply chain disruptions caused by war, sanctions and pandemic, interest rate increases are likely to trigger more debt crises, much worse than before. Current discourses, for example about China's ‘debt trap’ diplomacy, distract from urgently needed international and national measures to avert the looming debt crises.

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Section: Replaying the 1980s?mentioning

confidence: 99%

Chronicles of Debt Crises Foretold

Chowdhury,

Sundaram

2023

Development and Change

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“…In the context of G7 countries, Chen and Chen [8] show that oil prices and exchange rates are interconnected, and oil prices have the capability to forecast future exchange returns. Wiegand [23], Miller and Rati [24], Narayan et al [12], Lizardo and Mollick [13], and Basher et al [25] show that the relationship between oil prices and exchange rates can fluctuate over various time periods, implying that it is not constant across time. Thus, policymakers in many countries often pay considerable attention to the connectedness between oil prices and exchange rates.…”

Section: Review Of Econometric Approachesmentioning

confidence: 99%

A Review of Econometric Approaches for the Oil Price-Exchange Rate Nexus: Lessons for ASEAN-5 Countries

Kisswani

Fikru

2023

Energies

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This paper reviews alternative econometric approaches the literature has used to examine the connectedness between oil prices and exchange rates and illustrates their application using quarterly data from 1970: Q1 to 2022: Q1 for ASEAN-5 countries, which are as follows: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Although most studies examining the impact of oil prices and exchange rates apply the Ordinary Least Squares (OLS) approach with symmetry, the quantile regression (QR) method is shown to offer a thorough investigation of the connectedness. For ASEAN-5 countries, we present a comparative analysis of both methodologies (OLS and QR) with and without asymmetry. Our findings suggest that asymmetric effects triggered by oil prices are noticeably heterogeneous across quantiles. Hence, future studies should allow for asymmetry in the oil price by decomposing the price into positive and negative changes to further investigate the connectedness between oil prices and exchange rates.

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The Real Estate Market in Developed Economies and Emerging Economies

Ogbenjuwa

2023

Real Estate Finance and Economics

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Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price Boom

Cited by 3 publications

References 11 publications

Chronicles of Debt Crises Foretold

Chronicles of Debt Crises Foretold

A Review of Econometric Approaches for the Oil Price-Exchange Rate Nexus: Lessons for ASEAN-5 Countries

The Real Estate Market in Developed Economies and Emerging Economies

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