First Response Paper From: Peng Wang 09/02/2013 When we want to discuss why do exchange rates have an effect on the trade balance, we need to figure out what is the trade balance and exchange rate first. According to my knowledge, the trade balance refers to the value of all the goods and services we sell to other countries (exports) minus the value of all the goods and services we buy from foreigners (imports). There
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我国上市公司外汇风险暴露的行业特征研究 ——基于深市行业指数的实证分析 摘要 自2005年7月21日我国汇率形成机制改革以来，人民币持续升值，且波动幅度不断加大，加之中国参与国际贸易的程度不断加深，我国企业的外汇风险暴露问题也日益突出，引起国内外学者的广泛关注。本文结合前人的研究，从行业特征的角度出发，分析汇率波动给不同行业带来的影响有何差异，并结合实际分析造成这种差异的原因。 本文首先对外汇风险暴露的基本概念、分类以及衡量方法进行了理论性的介绍，然后从宏观和微观两个层面分析了企业外汇风险暴露的影响因子，并在此基础上提出了实证分析的基本假设，并利用Jorion的资本市场模型，运用深市行业指数数据，对人民币汇率波动对不同行业指数收益率的影响进行实证分析，结果表明：所选行业中有43%的行业存在着显著的外汇风险暴露，且系数均为正，说明这些行业受到人民币升值的负面冲击；竞争性行业的外汇风险暴露程度显著高于垄断性行业；制造业及其细分行业的外汇风险暴露水平整体高于其他行业，占所有风险暴露显著行业的56%；进口行业从人民币升值中的获益并不明显，出口行业则受到显著的负面冲击。 最后，本文
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Causes and Kinds of BOP Disequilibrium Balance of Payments Adjustments Direct Measures to correct BOP Problems of Exchange Control Exchange Control Currencies become inconvertible Foreign trade restricted Creates a multiple exchange rate system Creates Conditions for Bilateral Trade Agreements Foreign Exchange Rate Structure of Foreign Exchange Market Functions of Foreign Exchange Market (i) Transferring foreign currency from one country to another where it is needed in the
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A STUDY ON FOREIGN EXCHAGE AND ITS RISK MANAGEMENT Project submitted in partial fulfillment for the award of Degree of MASTER OF BUSINESS ADMINISTRATION DECLARATION I hereby declare that this Project Report titled “A STUDY ON FOREIGN EXCHANGE AND ITS RISK MANAGEMENT” submitted by me to the Department “XXXXX” is a bonafide work under taken by me and it is not submitted to any other University or Institution for the award of any degree diploma / certificate or published
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The Financial Crises in Russia and East Asia: How the World Bank can Help. 1 - Overview of Asian financial crisis On July 2, 1997, the Government of Thailand abandoned its efforts to maintain a fixed- exchange rate – the Baht had been pegged to a basket of currencies dominated by the U.S. dollar – and allowed the Baht to float. This Baht quickly depreciated, falling 18% on the first day alone. The collapse of the Thai Baht was followed by speculative attacks on other countries’
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representatives from 44 countries met in New Hampshire to design a new monetary system to replace the collapsed Gold Standard system. The agreement reached established two multinational institutions the International Monetary Fund (IMF) and the World Bank. The IMF job would be to maintain order in the international monetary system, the World Bank job would be to promote general economic development. The agreement called for a system of fixed exchange rates that would be enforced by the IMF. The IMF was
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Rupee Depreciation: Probable Causes and Outlook The Indian Rupee has depreciated significantly against the US Dollar marking a new risk for Indian economy. Till the beginning of the financial year (Apr 11-Mar 12) very few had expected Rupee to depreciate with most hinting towards either appreciation or status quo in the rupee levels. Those few who had even anticipated may not have imagined the scale of depreciation with rupee touching a new low of around Rs 54 to the US Dollar. What is even more
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1. Introduction The exchange rate volatility and its impact on the volume of international trade has been studied Intensively during 1970’s when the world economy shifted from fixed exchange rate to free floating Exchange rate. The hypotheses may be that if the exchange rate volatility is higher than it will generate Uncertainty of the future profit from export trade. To diminish the uncertainty investors can go for Currency hedge and minimize the uncertainty related to international trade
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Macroeconomics concepts covered:- 1)Monetary Policy Trilema :- Mundell–Fleming model argues that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy. It can choose any two for control, and leave third to the market forces. This is called monetary policy trilema. 2) Devaluation of money & its effects:- (a) Exports become cheap. (b) Import become expensive. (c) Trade deficit decreases. (d) Balance of trade is achieved.
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Currency devaluation is good for a country In the recent year, the global financial crisis is more increasingly serious and many countries have become a victim. Consequently, currency devaluation is a considerable option to improve the status quo. Devaluation is viewed as a method of improving a country's "competitiveness", or in other words rendering domestically produces goods more attractive abroad while making foreign produced goods less attractive at home (Miles 1978, introduction 2). Supply-and-demand
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