Showing papers on "Foreign exchange market published in 1970"

The Expatriate Workers Remittances, Parallel Foreign Exchange Market and Macroeconomic Performance in Sudan

Abstract: The results of this paper show that higher premiums have deleterious effects on official exports and tax revenue from foreign trade, also as expected a high premium tends to accelerate capital flight. The results of the paper also show that there exists weak evidence that controlling inflation becomes more difficult under high premium regimes. The implications of these findings for future economic reform in Sudan, especially regarding enhancing remittances by expatriate Sudanese working abroad and reversing of capital flight, are indicated.

Exchange Market Pressure and Monetary Policy: Evidence from Pakistan

Abstract: The study employs Girton and Roper (1977) measure of exchange market pressuresum of exchange rate depreciation and foreign reserves outflow, to examine the interaction between exchange market pressure and monetary variables, viz. domestic credit (Reserve Money) and interest rate. Evidence from impulse response functions suggests that domestic credit has remained the dominant tool of monetary policy for managing exchange market pressure. The increase in domestic credit upon increase in exchange market pressure (during 199198) is imprudent. The result suggests that fiscal needs/growth objective might have dominated the external account considerations during the span. Post 9/11 there is evidence of sterilised intervention in forex market. Interest rate has also weakly served as the tool of monetary policy during the hay days of foreign currency deposits (199198). The finding implies that for interest rate to work as tool of monetary policy vis-a-vis exchange market pressure a reasonable degree of capital mobility is called for.

Pricing of Foreign Exchange in Indonesia, 1966-67

Abstract: As a Dutch colony, the Indonesian archipelago fully qualified as an "export economy," that is, one whose prosperity fluctuated in response to the world prices of rubber, sugar, palm oil, petroleum, and tin. As an independent nation, Indonesia has experienced a dwindling of the absolute and relative importance of her foreign trade. Indeed, at the very outset of her period of independence, the sources of her foreign exchange earnings were in a state of low activity caused by war damage and disruption of market relationships. That lost ground has never been recovered, and postwar events have resulted in further decline. Her prewar positions of strength in sugar and tin have never been regained, and her position of primacy in rubber has passed over to Malaysia. In the 1960s, Indonesia's exports have fallen consistently below 10 percent of GNP-roughly in the neighborhood of 6-8 percent-with merchandise imports falling slightly below that proportion. A substantial deficit in payments for services has given her a consistent balance-of-payments deficit on current account of $200 million to $250 million annually in this recent period. The persistent payments deficit, the awareness of large export potential, and (more importantly in the short run) the need to tax foreign trade heavily in order to maintain anything like an adequate level of government activity, all force economists to direct their attention to the foreign trade sector in this country, in spite of its reduced size. This interest has been heightened in recent months because of the quite radical movement of the exchange rate policies of the Indonesian government in the direction of liberalization. The primary vehicle of this policy change is the broadening of the market for export bonus (BE) certificates. The central feature of the system is that most exporters are required to surrender vir-

The Components of Electronic Order-Driven Spot FX Bid-Ask Spreads Pre- and Post-EMU

Abstract: This paper applies an established bid-ask spread decomposition model to spot foreign exchange market in order to assess the impact of European Monetary Union (EMU). Additionally, the paper presents and tests a modified decomposition model which is specifically adapted to the features of order-driven markets. The latter model provides much improved performance. Price clustering is introduced as a new explanatory factor within this framework and is shown to be vitally important in understanding the bid-ask spread and price determination.