Exchange Market Pressure in the Central African Economic and Monetary Community (CAEMC) Area: Empirical Assessment of the Macroeconomic Determinants

Samba, Michel Cyrille

doi:10.1080/10168737.2018.1523213

Cited by 2 publications

(1 citation statement)

References 26 publications

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“…However, according to Tanner (2002), the interest rate is an ex-ante indicator that reflects the intentions of monetary authorities, whereas domestic credit indicates the ex-post monetary policy stance. An expansionary monetary policy shock that manifests itself in increasing credit growth causes a depreciation of the domestic currency under a flexible exchange rate regime but a loss of international reserves under a fixed exchange rate regime (Gochoco-Bautista & Bautista, 2005;Samba, 2018). The positive sign of domestic credit growth in the high-pressure regime confirms that expansionary policies shaped by the economic growth preferences of policy authorities increase the pressures on the exchange market.…”

Section: Empirical Findingsmentioning

confidence: 95%

Analyzing Exchange Market Pressure Dynamics with Markov Regime Switching: The Case of Turkey

İlhan

Akdeni̇z

Özdemir

2022

OMEE

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This study analyzes the dynamics of exchange market pressure in Turkey by employing the Markov regime switching model for the period from January 2006 to December 2019. Our findings show that there are two regimes in the foreign exchange market, characterized as low- and high-pressure periods. The domination of the high-pressure regime in the sample period indicates that depreciation pressure prevails in the Turkish foreign exchange market. During this regime, the pressure is aggravated by the rising inflation, credit growth, and VIX, and the falling of short-term external debt. Thus, in the presence of capital flows, the preferences of policy authorities regarding price stability and growth determine the course of the pressure. When these policy choices favor credit-driven growth, depreciation pressure in the foreign exchange market is exacerbated through the current account deficit.

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Section: Empirical Findingsmentioning

confidence: 95%

Analyzing Exchange Market Pressure Dynamics with Markov Regime Switching: The Case of Turkey

İlhan

Akdeni̇z

Özdemir

2022

OMEE

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Modeling Exchange Market Pressure in East Asian Economies

Lau¹,

Yong²,

Bariyah³

2021

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics

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This chapter model the factors behind the instability of exchange rate by using exchange market pressure (EMP) index. The authors focus first to construct the EMP and then secondly, test the interrelationship between EMP, real gross domestic product, money supply (M2), consumer price index, trade openness and share price using quarterly data in selected East Asian countries. The empirical results of this study explicitly indicate that EMP is determined by the states of other variables in most of the studied countries. Planning on the macrolevel is essential when managing and ensuring continuous monitoring of the exchange rate condition. This would translate into positive macroeconomic welfare and economic growth sustainability.

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Exchange Market Pressure in the Central African Economic and Monetary Community (CAEMC) Area: Empirical Assessment of the Macroeconomic Determinants

Cited by 2 publications

References 26 publications

Analyzing Exchange Market Pressure Dynamics with Markov Regime Switching: The Case of Turkey

Analyzing Exchange Market Pressure Dynamics with Markov Regime Switching: The Case of Turkey

Modeling Exchange Market Pressure in East Asian Economies

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