Money stock versus monetary base in time–frequency exchange rate determination

Autoregressive conditional durations: An application to the Surinamese dollar versus the US dollar exchange rate

“…Hence, a rise in M0 induces a jump in the exchange rate, leading to an exchange‐rate depreciation. This is in line with Hnatkovska et al (2016) and Funashima (2020). In contrast to M0, the effect of inflation is weak.…”

“…Hence, in the context of Suriname, monetary policy can help steer the exchange rate via M0. This finding is in line with Funashima (2020), Hnatkovska et al (2016), and Kim and Lim (2022). The depreciating impact of oil prices on the exchange rate could reflect the country's dependence on gasoline from abroad, though being a net commodity exporter.…”

“…Empirical studies have also linked an expansion in the monetary base to exchange‐rate depreciation. See for instance Hnatkovska et al (2016), Kim and Lim (2022), and Funashima (2020). Hypothesis An increase in the M0 leads to a depreciation of the market USD/SRD exchange rate.…”

“…Empirical studies have also linked an expansion in the monetary base to exchange-rate depreciation. See for instance Hnatkovska et al (2016), Kim andLim (2022), andFunashima (2020).…”

China–US economic and trade relations, trade news, and short‐term fluctuation of the RMB exchange rate

“…Determinants of long‐term exchange rate fluctuation also include the relative labor productivity of different countries (Berka et al, 2018; Canzoneri et al, 1999), and the structural factors underlying each country's GDP, trade balance, and net foreign asset positions (Bergstrand, 1991; Clague, 1986; Faruqee, 1995; Kharrat et al, 2020). In the short‐run, numerous macro‐economic factors will affect the fluctuation of the exchange rate of one country's currency against those of other countries, including money supply (Cheung et al, 2019; Funashima, 2020), inflation (Ito & Sato, 2008), interest rate gap between domestic and foreign countries (Hansen & Hodrick, 1980; Schmitt‐Grohé & Uribe, 2022), international capital flows and capital controls (Calvo et al, 1993; Dooley & Isard, 1980), expectations (Mussa, 1982), political factors (Frieden, 1994; Korus & Celebi, 2019), foreign exchange interventions (Daude et al, 2016; Vargas‐Herrera & Villamizar‐Villegas, 2020), stock prices (Nusair & Olson, 2022), and news (Aquilante et al, 2022; Frenkel, 1982; Narayan et al, 2021). These factors will help estimate a benchmarking of the exchange rate of an economy.…”