Exchange rate fluctuations and interest rate policy

Liu, Tie‐Ying; Lee, Chien‐Chiang

doi:10.1002/ijfe.2336

Cited by 58 publications

(18 citation statements)

References 64 publications

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“…Empirically, the results of this study are in line with research conducted by Arifin (2003), which shows that interest rates are very effective in strengthening exchange rates. Likewise, with the research of Yung (2021) and Liu and Lee (2020) found that there is an effect of interest rates on the exchange rate. This condition clarifies a need for a measured policy in maintaining the exchange rate during the Covid-19 pandemic because determining the correct interest rate will encourage the strengthening of the exchange rate.…”

Section: Resultsmentioning

confidence: 82%

“…However, Yung (2021) found that interest rates also caused exchange rate fluctuations. Liu & Lee (2020) explain the effect of interest rate adjustment on exchange rate volatility in China/the US. Furthermore, changes in the exchange rate of China/US have a slightly more substantial effect on interest rates in the US than on interest rates in China.…”

Section: Introductionmentioning

confidence: 99%

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Impact of Coronavirus and Macroeconomic Indicators on Sharia Obligation with Simultaneous Model

et al. 2021

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This study examines the macroeconomic variables exchange rate and BI rate in collaboration with the Coronavirus Disease case against Sukuk. In addition, this study also examines the exchange rate influenced by the BI rate variable and the case of Coronavirus Disease. The data analysis method in this study uses a simultaneous equation model Two-Stage Least Square. This study found that the exchange rate affects the demand for Sukuk while the BI rate does not affect it. But what is surprising is that when the Coronavirus Disease 2019 case occurred, it did not affect the demand for Sukuk. This study also found that the exchange rate is influenced by the BI rate and the case of Coronavirus Disease. The contribution of this research is that when the government cannot intervene in the exchange rate, which can affect the demand for Sukuk, it can be done by intervening in the BI rate.JEL Classification: C30, G12, O10How to Cite:Bawono, A., Rofiuddin, M., Nabila, R., & Anwar, S. (2021). Impact of Coronavirus and Macroeconomic Indicators on Sharia Obligation with Simultaneous Model. Signifikan: Jurnal Ilmu Ekonomi, 10(1), 291-298. https://doi.org/10.15408/sjie.v10i2.21084.

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Section: Resultsmentioning

confidence: 82%

Section: Introductionmentioning

confidence: 99%

Impact of Coronavirus and Macroeconomic Indicators on Sharia Obligation with Simultaneous Model

et al. 2021

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“…Because there is a shortage of export growth, businesses typically cut their output (Rajput, Changotra, Rajput, Gautam, Gollakota, & Arora, 2021). The financial crisis's impact indirectly resulted in a decrease in liquidity, an increase in interest rates, a decrease in commodity prices, a weakening of the exchange rate, and a weakening of growth in sources of funds (Liu & Lee, 2022). This also led to a decrease in consumer, investor and market confidence in various financial companies, which weakened the capital market (Lins, Servaes, & Tamayo, 2019).…”

Section: Asian Economic and Business Developmentmentioning

confidence: 99%

The Effect Of The Financial Crisis On Export Competitiveness In Indonesia

Fitria¹

2022

AEBD

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The study aims to investigate inflation and exports, and interest rates with a research period from 1990 to 2021. VECM (Vector Error Correction Model) is the analytical technique have been used to ascertain the vector causality link between variables. Utilized secondary data in this investigation. Obtained using official World Bank statistics. We discovered that strengthening the rupiah currency rate is only marginally positively impacted by increasing competition in Indonesian exports. However, inflation in Indonesia significantly depresses the currency exchange rate which has a pressing upon suppressing how much exports can value. This is because the rupiah exchange rate significantly boosts exports. When inflation depresses the value of the rupiah, it has a great effect on its suppression in terms of the rupiah exchange rate which continues to suppress Indonesia's export competitiveness.

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“…In April 2018, the American government imposed additional tariffs of 25 percent on $50 billion worth of commodities imported from China. The Chinese government responded immediately by imposing 25 percent additional duty on the same amount of imports from the United States (for an extensive discussion see Yu and Zhang, 2019;Kwan, 2020;Liu and Lee, 2020).…”

Section: I-introductionmentioning

confidence: 99%

The Impacts of the Dollar-Renminbi Exchange Rate Misalignment on the China-United States Commodity Trade: An Asymmetric Analysis

et al. 2022

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Contrary to most existing studies of the literature that assumed that the effects of real exchange rate (RE) misalignment on trade flows are symmetric, this paper considers a more general and realistic framework allowing for possible asymmetric effects. We use monthly time-series data over the January 2002-October 2020 period from 66 two-digit industries that trade between China and the U.S. in order to avoid the well-known aggregation bias. Estimates of symmetric errorcorrection models (ECM) revealed that real dollar-renminbi rate misalignment has short-run effects on 35 U.S. exporting and 53 U.S. importing industries. These short-run effects translated into the long run in 18 and 17 industries, respectively. The numbers increased considerably when estimating asymmetric ECM. Indeed, short-run asymmetric effects were then found in 47 U.S. exporting and 62 U.S. importing industries, which translated into long-run asymmetric effects in 20 U.S. exporting and 21 U.S. importing industries. Our analysis highlights the importance of separating currency overvaluation from currency undervaluation in assessing the effects of the RE misalignment on trade flows between the U.S. and China and confirms that the impacts are industry specific. Our findings (robust to possible structural breaks) are useful for trading industries, and policymakers, and advocate accounting for asymmetries when examining the RE misalignment-trade flows nexus.

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Exchange rate fluctuations and interest rate policy

Cited by 58 publications

References 64 publications

Impact of Coronavirus and Macroeconomic Indicators on Sharia Obligation with Simultaneous Model

Impact of Coronavirus and Macroeconomic Indicators on Sharia Obligation with Simultaneous Model

The Effect Of The Financial Crisis On Export Competitiveness In Indonesia

The Impacts of the Dollar-Renminbi Exchange Rate Misalignment on the China-United States Commodity Trade: An Asymmetric Analysis

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