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This study aims to analyze the impact of the Domestic Investment program (PMDN), Bank Indonesia interest rate (BI Rate), and exchange rate on the Jakarta Composite Index (JCI) in Indonesia. To test the relationship between the independent variable (PMDN, BI Rate, and exchange rate) and the dependent variable (JCI) over a certain period of time, multiple regression analysis method is used. This research uses data obtained from various reliable and relevant sources. The findings of this study are expected to provide a deeper understanding of the factors that influence JCI in Indonesia and provide insight for policymakers to improve the investment climate. The conclusions and policy recommendations generated from this study are expected to be able to make a positive contribution to Indonesia's economic development in the long term. [ABSTRACT FROM AUTHOR]

This study investigates the long-run relationship between the exchange rate, interest rate, stock prices and output. The results demonstrate that a single restricted relationship is accepted when a structural break is incorporated into the cointegrating vector. Compared with the hypothesis tests on the single restricted relationship, the hypothetical structure comprising multiple relationships in the cointegrating vector is generally accepted in most countries, confirming the interaction between the relationships in the system. Our findings regarding the real exchange rate and stock price differentials appear to contradict the uncovered equity returns parity condition, whereas the relationship between the real exchange rate and interest rate differentials is consistent with the flexible price approach. [ABSTRACT FROM AUTHOR]

The core objective of this article is to explore the viability of uncovered interest parity and to reconnoiter major determinants of domestic interest rates of the Pakistan and China economies. It is imperative to study the interest rate parity that assistances to comprehend that exactly how exchange rate and domestic interest rate influence foreign interest rate of two economies in emerging trends in international trade. The World Development Indicators is main source of data gathering, and it ranges from 1980 to 2023 for the analysis of both models. This study considers two models, Engle–Granger causality has been applied in Model 1, to analyze the uncovered interest parity, and findings indicate that the exchange rate of each country has no effect on the interest rate of the other country. However, Model 2 investigates the main determinants of domestic interest rate and their long-run associations for Pakistan and China. To capture the long-run association, ARDL estimation technique has been deployed, and findings show the long-run relations and co-integration among the policy variables of both countries. In Pakistan, consumer price index and exchange rate hold positive linking with the domestic interest rate; however, output level is adversely correlated. The error correction term is 91%, confirming the rapidity of equilibrium adjustment when a shock occurs. Regarding the Chinese economy, consumer price index and exchange rate have a negative impact on China domestic interest rate. The results of the error correction model indicate an 80% speed of convergence in the long run. This study suggests that improvement in productivity and exchange rate may assist both economies to experience steady exchange rate and interest rate. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Economics, Business & Politics (UEIP) is the property of International Journal of Economics, Business & Politics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The recent multidimensional crisis has harmed the global economy because countries are currently integrated. In this study, we examine the spillover effect of the United States (US) interest rate on the output gap of ASEAN+3 countries using the dynamic spatial Durbin model from 2010 to 2020. After controlling for various institutional variables, this analysis further examines the effect of the exchange rate and the COVID-19 pandemic on the output gap. This model captures the spatial interactions and short- and long-term effects of interest rate monetary policies. The findings indicate a negative spillover effect of the US central bank interest rate on ASEAN+3 countries' output gap. The result had significant direct and indirect short-term effects. Additionally, exchange rates negatively affect the output gap. The output gap decreased because of the COVID-19 pandemic. This study is expected to be useful for monetary authorities in developing the best monetary policy for economic recovery. [ABSTRACT FROM AUTHOR]

Developing nations have the task of effectively managing their external debt. The government is urged to comprehend the decisive component in managing its external debt, despite the varying viewpoints among economists. In addition, the world sees the need for institutional quality to optimize its economic policy. Institutional quality shows accountability, stability, effectiveness, quality, law, and trust. Our research examines the determinant factors of external debt and discusses the policy to manage external debt. We regress the inflation rate, exchange rate, interest rate, trade openness, and institutional quality on external debt. This study also uses moderated regression analysis to examine the interaction between institutional quality and macroeconomic indicators on external debt. We selected 52 samples from five ASEAN developing countries from 2008 to 2019. The first study found that the inflation rate, interest rate, and institutional quality have a negative impact on external debt, while the exchange rate and trade openness have a positive impact on external debt. Next, we were surprised that institutional quality could not moderate the relationship between the inflation rate, exchange rate, and interest rate on external debt. Further, it only moderated the relationship between trade openness and external debt. In the end, we discuss the external debt determinants from the selected ASEAN developing countries with the theories. [ABSTRACT FROM AUTHOR]

Inconsistencies between changes in foreign exchange reserves and interest rates, inflation, export value, and the Rupiah exchange rate versus the US Dollar were revealed by this research. The aim is to determine how Indonesia's foreign exchange reserves are affected by interest rates, inflation, exchange rates and exports. This research uses descriptive quantitative methods with an explanation strategy. The research was conducted using secondary data from Bank Indonesia and the Indonesian Central Statistics Agency for the period 2005-2021, with a sample of 11 data taken using the selective selection method. Through IBM SPSS version 23, multiple linear regression was used to analyze the data. The findings show that while exports have a sizable positive impact on foreign currency reserves, interest rates have a significant negative impact. However, there is little impact on foreign exchange reserves from inflation and the exchange rate. In conclusion, these factors together have a big impact on Indonesia's foreign exchange reserves: interest rates, inflation, exchange rates, and exports. [ABSTRACT FROM AUTHOR]

This study will work on some core variables including exchange rate that is considered as an important variable for different nations and size of level of development. In economics different functions are impacted here by exchange rate changes and it is very important to analyze that the macroeconomic factors including interest rate, inflation rate may impact on exchange rate positively or negatively. For the economy of Pakistan covering the period 2000 to 2023 it is analyzed that the multiple regression model by using exchange rate, inflation rate, interest rate, the value of exports and the value of imports in Pakistan having some important results for country. This study has used unit root test co-integration test and ARDL for evaluation of short run and long run effect of some core variables. This research found and concluded that all the right-side variables in multiple regression model having some important impact on relationship for the determination of exchange rate and it is explored that the inflation rate interest rate import and export are captured to regressive exchange rate in the economy of Pakistan. [ABSTRACT FROM AUTHOR]

The study seeks to explore and present the macroeconomic factors that drive Foreign Direct Investments (FDI) in Nigera. It employed least square methods with model diagnostic tests and Granger causality processes on 1986--2020 Nigerian yearly data. The results show that interest rate, currency rate, and level of economic activity (represented by growth in real GDP) influence the flow of FDI into Nigeria. FDI is neither driven by inflation nor by market openness. The policy implications are that when considering policies aimed at attracting foreign direct investors to Nigeria, government and monetary authorities should give priority to such factors as interest rates, exchange rates, and the growth rate of the economy. It is suggested that reduced loan rates and slight Naira depreciation should be encouraged and promoted. [ABSTRACT FROM AUTHOR]

Islam allowed the selling transaction and prohibited the interest rate. So, can an economy function properly and efficiently without an interest rate? In a conventional economy the interest rate is used as a tool to stimulate investment, savings, money supply, exchange rate, and other economic variables. Thus, the concept of an interest rate is deeply embedded, and plays a vital role in an economy. It is not easy to remove this concept from an economy. The purpose of this paper is to demonstrate that an economy can function properly without the use of an interest rate by looking at the Palestinian economy. The Palestinian economy is a small, open, and semi-independent on the Israeli economy; it is thus unique in nature, where it is an economy that has no local currency. Palestinians use the New Israeli Shekel, US Dollar, Jordanian Dinar, and Euro. So, the Palestine Monetary Authority (PMA) place the role of monitoring the function of the banks, rather than the role of a Central Bank. This is of course due to the absence of a local currency. Therefore, the Palestinian Government has no monetary policy, i.e., monetary policy does not exist in the Palestinian economy. In addition, the concept of an interest rate to an individual Palestinian can be replaced by the concept of profit sharing. That is, a Palestinian can be driven by the concept of profit sharing rather than the concept of an interest rate. This paper concludes by using an empirical example that an economy can function without an interest rate. [ABSTRACT FROM AUTHOR]

This study accounts for the nexus between financial development and intra-trade relationships using nine Regional Comprehensive Economic Partnership (RCEP) countries with the extraction of data from secondary sources spanning between 1990 and 2021. The following are the conclusions drawn from the study: exchange rate, interest rate and inflation rate, which are critical macroeconomic variables, represent unfavourable factors that suppress the intra-trade relationships within the RCEP region. In light of the above, this study recommends that any time the policymakers in RCEP countries desire better intra-trade relationships within RCEP countries, they should implement a unified monetary policy that will stimulate interest rate, exchange rate and inflation rate in such a way that the intra-trade relationships will be enhanced among the RCEP countries. [ABSTRACT FROM AUTHOR]

Purpose: This article examines the relationship between oil price volatility, exchange rate, interest rate, and the stock market in the GCC countries. Design/Methodology/Approach: We used an annual data set from January 2006 to December 2015. Then, we explore the feedback between this relation by one-step generalized method of moments (GMM) system estimator and panel vector autoregressive (PVAR) model. Findings: We find that the increased of the interest rates leads to increased oil price, which implies that this result is completely normal since the low-interest rates, decrease in oil prices. Practical Implications: The study provides a significant contribution as its findings can give policymakers, regulators and investor. Moreover, this study can help import and export oil. In fact, should be reformed energy taxation to encourage households and businesses to protect themselves against future oil price increases and facilitate the transition of energy. Originality/Value: A harmonized action at the European level would make the reform of energy taxation a virtuous tool to reduce public deficits. [ABSTRACT FROM AUTHOR]

Copyright of Economic Horizons / Ekonomski Horizonti is the property of Economic Horizons and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper investigated exchange rate, interest rate, and economic development in Nigeria between 1980 and 2020. The study employed secondary data and sourced from the Central Bank of Nigeria (CBN) and World Bank Data Indicators covering periods of 1980 to 2020. The data were analyzed using correlation analysis, Johansen Co integration, and co integration regression Fully Modified ordnalist Square methods (FMOLS) were employed to established long run influence of exchange rate and interest rate on economic development. The study showed that long run relationship existed between exchange rate, interest rate, and economic development in Nigeria. Specifically, a number of results were obtained: in the case of HDI, economic development is negatively related to exchange rate; interest rate had significant relationship with economic development in Nigeria; and the interactive relationships of exchange rate and interest rate had a significant positive relationship with economic development. Using per capita income as a measurement of economic development revealed that; exchange rate had positive relationship withi economic development; the interactive effects of exchange rate and interest rate is positive and significant on economic development. Therefore, the study recommends that; proactive management of Nigeria's exchange rate and interest rate must be the top priority of the country's monetary authority. Therefore, the monetary authority through Central Bank of Nigeria should, as a matter of urgency, stabilize the nation's exchange rate and improve the nation's interest rate in a bid to attract investment and improve the nation's capital accumulation necessary for long term economic development. [ABSTRACT FROM AUTHOR]

Uncertainty about monetary policy associated with uncertainty in interest rate is an important determinant of economic decisions. Due to the dominant position of the US economy on global financial markets, in addition to countries' own uncertainties, uncertainty related to the monetary policy of the USA may have an impact on other economies. In this study, we investigated the impact of interest rate uncertainties for different maturities on industrial production, inflation, unemployment and exchange rate. We used the impulse response functions based on the vector error correction model (VECM). We also conducted the Granger causality test to analyse the causality. We examined the impact of US monetary policy uncertainty on the mentioned variables of Turkey. Our findings suggest that uncertainty in long-term interest rates increases unemployment and inflation rates. Although we find that uncertainty in interest rate reduces growth of industrial production, we do not find a causal relationship between these variables. Finally, we show that a shock related to US monetary policy uncertainty tends to increase unemployment significantly, while reducing the growth of production. [ABSTRACT FROM AUTHOR]

Financial stability is one of the main factors for a country's economic sustainability nowadays. Financial instability has adverse effects on the economy which can lead to the financial crisis. This research tries to answer how monetary policy related to Indonesian financial stability in the short and long term, how specific the relations between its parts such as money supply, interest rate, and exchange rate to indonesian financial stability, and which one of these parts that have ways more effective to influence Indonesian financial stability. This research data use time series quarterly as quantitative data in Indonesia. By employing econometric models of error correction on quarter data that consist of the stationary stochastic process, long-run model and cointegration approach and error correction model, this model can indicate how quickly the effect of the money supply, interest rate or exchange rate is fully accepted by the financial stability in the short term. The finding of this study showed that the increase in interest rate began to be able to improve indonesian financial stability responsively in four times the period, namely an increase of one percent in interest rate could increase 0.4161 percent of financial stability in Indonesia. [ABSTRACT FROM AUTHOR]

As economic activities came to a standstill during the COVID-19 pandemic, the Philippines, like many economies across the globe, experienced rising inflation, currency depreciation and fluctuating capital markets. To manage these variables and stabilize the macroeconomy. the central bank resorted to monetary tightening. In the Philippines, a key mechanism that contributes to this stabilizing efect rests on remittances that have been cushioning the economy from the effects of volatilities and uncertainties in the global economy. During economic downturns and reduced capital flows, remittances provide support not only to recipient households but also to the country's finan.cial sector. Using time series analysis, we estimate the response of remittance injtows on impulses from selected macroeconomic variables. namety interest rate, inflation rate and exchange rate. A common characteristic shared by the selected indicators is their influence on recipient households' consumption-related decisionmaking process. These findings warrant the need to redesign major institutional policies to manage remittances in light of their anticipated feedback effect on the economy. [ABSTRACT FROM AUTHOR]

The present study examines the long-run and short-run e¤ects of monetary factors (money supply, interest rate, inflation, and foreign currency exchange rate) on the Indian stock market. The study uses sophisticated econometric tools to analyse monthly observations from January 1993 to December 2019. The Augmented Dickey Fuller (ADF) test indicates that the variables involved in the present study are either I(0) or I(1). The Bai-Perron multiple break point test identifies four breakpoint dates in the Indian stock market index series. The breakpoint dates are incorporated as di¤erent dummy variables in the ARDL-ECM regression. The F-bounds test reveals that the variables in the study are cointegrated within the time period under consideration. Our findings show that the interest rate, which is a proxy for monetary policy instrument, and the foreign currency exchange rate have a negative impact on the Indian stock market both in the long-run and short-run. Furthermore, we find that structural changes significantly a¤ect the performance of Indian stock market. The study covers a long period of time, which the majority of previous work did not consider. Furthermore, the study uses di¤erent dummy variables in the ARDL model to represent structural breaks (as determined by the Bai-Perron multiple break point test). [ABSTRACT FROM AUTHOR]

This study assesses the role of monetary, fiscal factors, and trade openness causing variations of nominal and real interest rates in India for the deregulated regime. The autoregressive distributive lag (ARDL) bounds testing approach to cointegration finds that deposit rate, lending rate, and real interest rate have long‐run associations with the monetary, fiscal policy instruments, and trade openness. The error correction model representation of the ARDL framework finds that the broad money supply negatively impacts the deposit rate and the real interest rate, while positive impacts of income on each of the three interest rates are noticed. The fiscal deficit has a significant short‐term negative impact on the deposit rate and has a positive impact on the real interest rate. The exchange rate and openness to trade lower interest rates. The econometric appraisal may be perceptive to keep interest rate in the desired trail through the judicious adjustments of the policy instruments and deficit management. The significant impact of openness to trade on interest rates is a critical issue that the macroeconomic policy may face more challenges. [ABSTRACT FROM AUTHOR]

This paper analysed the impact of interest rate and exchange rate volatility on banking sector stock returns in South Africa considering the Covid-19 pandemic. This paper employed daily secondary data for the period 01 January 2011 - 19 August 2021. The OLS and GARCH approaches were utilized to analyse the relationship between the variables. The results indicate that the interest rates have a positive and significant relationship with bank stock returns as four out of five banks showed positive coefficients in the OLS estimator. Moreover, a high foreign exchange rate leads to a negative bank stock returns as the coefficients from the OLS estimator were negative. The ARCH and GARCH models' results indicate that bank stock returns are determined by their past volatility. The study has managerial implications for the banking sector because interest rate and exchange rate volatility increase the risks associated with the returns, implying that banks should consider various hedging strategies in mitigating these risks. Therefore, banks should consider various hedging strategies while the investors could attentively consider monetary policies during the investment decision process. [ABSTRACT FROM AUTHOR]

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Sustainable financial development plays a vital role in new institutional economics and transaction cost economics. This asserts the important role of interest and exchange rates and political stability as determinants of an economy's institutional quality. The current study aimed to investigate the effects of the real interest rate, the exchange rate and political stability on foreign direct investment (FDI) inflows in G7 and Gulf Cooperation Council (GCC) countries from 2005 to 2019. The panel fully modified least square and panel dynamic least square estimators used in this study revealed a significant positive long-run relationship between the real interest rate and FDI inflows in the G7 and GCC countries. In addition, there was a significant negative long-run relationship between the exchange rate and FDI inflows in the G7 countries; this relationship was insignificant in the GCC countries. There was also a significant negative long-run relationship between political stability and FDI inflows in the GCC countries; this relationship was insignificant in the G7 countries. The panel least square method confirmed the results of the previous two estimators for the real interest rate and FDI inflows in the G7 countries. Based on these findings, to increase FDI inflows, efforts should be made to lower the lending interest rate and enhance capital formation and trade. Furthermore, market forces should be allowed to determine the real interest rate, and monetary policy should focus on developing a systematic exchange rate to promote political stability and the sustainability of foreign investment in developed and developing countries. [ABSTRACT FROM AUTHOR]

This study examined the effect of exchange rate fluctuation economic factors on financial performance of multinational companies in Nigeria, It specifically examined the effect of nominal exchange rate, real exchange rate, interest rate as well as exchange rate fluctuations on the financial performance of listed multinational oil and gas firms in Nigeria performance of deposit money banks in Nigeria. Secondary sources of data was employed to extract useful information from the Audited Annual Reports of the eight (8) oil and gas firms sampled were selected through purposive sampling technique for the investigation for the periods 2006-2020. The measures of exchange rate fluctuation economic factors comprise of foreign exchange rate fluctuation (FXRF), real exchange rate (REER), nominal exchange rate (NOER interest rate spread (INSR), firm's size (FSIZE), financial leverage (FLV) and business risk (BSR) with financial performance, being dependent variable measured by return on asset (ROA). Both descriptive and inferential statistics. Correlation and regression analysis were used to test the hypothesis. Findings revealed that nominal exchange rate and interest spread rate have positive and statistically significant relationships with return on asset (ß=1.395, pvalue 0,000 and 0.017;p-value 0.000) at the level of 5% level of significant while foreign exchange rate fluctuation, real exchange rate, firm size and financial leverage has a negative and statistically significant association with return on asset (ß=-0.0021, p-value=0.000,-8.01;p-value 0.049,-0.00031;p-value 0.038, and -0.00867;p-value|=0.002) respectively at 5% level of significant. The study concluded that exchange rate fluctuation economic factors have strong statistical relationship with the financial performance of listed oil and gas companies in Nigeria. Based on the findings, the researchers recommends that micro-economic factors such as financial leverage, company size, and business risk should be taken into consideration by the management of Nigerian listed oil and gas businesses when mediating on fluctuations in the country's foreign currency rate. To lessen the severity of exchange rate fluctuations, the appropriate authorities should take proper steps to protect the value of the native currency. Furthermore, oil and gas companies should constantly assess the impact of fluctuations in the nominal exchange rate on their income from upstream and downstream oil exploration activities, and implement strategies to mitigate the negative impact of these fluctuations. [ABSTRACT FROM AUTHOR]

The automotive industry is one of the manufacturing sub-sectors that play a vital role in countries' economies. However, this industry is not exempt from the effect of fuel price and financial risk components. This study investigates the effect of fuel price and financial risk components on the South African motor trade sales for the period 2008-2021. The research is built on previous work and research on the linkage between fuel price and country risks. Auto-regression Distributed Lag (ARDL) model was applied to monthly financial data (exchange rate, interest rate), fuel price and motor trade sales. Findings suggested the presence of a long-run relationship among these variables. Findings suggested the presence of a long-run relationship among these variables. It was found that both interest rate and exchange rate have negative impacts on long-run motor trade sales. Nonetheless, the fuel price was found to be statistically insignificant to influence motor-trade sales in the long run. The results also indicated that both interest rate and exchange rate cannot impact motor trade sales in the short run. Based on these results, the study stressed that policies that strengthen and stabilise the South African currency (exchange rate) are imperative to increase sales in the automotive industry and economy in general. Easing and lowering interest rates can also assist in boosting motor trade sales irrespective of the fuel price. The paper uniquely provides the interactions between fuel price, financial risk and sales within the South African automotive industry. It also suggests strategies that can be implemented to improve sales within the aforementioned industry. [ABSTRACT FROM AUTHOR]

This research studies the non‐linear relationship between interest rates and exchange rates for China and the United States using the rolling‐window method. We also investigate uncovered interest rate parity (UIP) and the capital market theory for the whole time period and subperiods so as to reconsider various economic connections between China and the United States. The results suggest that the effect of the latter's interest rate adjustment on China/U.S. exchange rate volatility is stronger than that of China's interest rate adjustment. Moreover, changes in the China/U.S. exchange rate have a slightly stronger effect on the U.S. interest rate than on China's interest rate. Our findings reveal that the interest rate parity theory does not hold for the entire sample period but may hold in subperiods. The results provide a reference for the steady implementation of RMB internationalization. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Administration & Economics is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of JDM: Jurnal Dinamika Manajemen is the property of Universitas Negeri Semarang, Fakultas Ekonomi, Jurusan Manajemen and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study investigates volatility persistence of exchange and interest rates in Africa taking into account the rate of volatility decay. Generalized autoregressive conditional heteroscedasticity (GARCH) model is used to estimate volatility persistence for these economies. The results presented in this study suggest that there is volatility persistence in emerging African exchange rate and interest rate markets. Further empirical estimates reveal that rate of volatility decay varies considerably among the economies, for instance, exchange rate volatility in Nigeria diminishes to half of its original size within two months, while it takes approximately 12 months for volatility in Ghana to diminish to half of its original size. The study concludes that exchange and interest rates volatility risk exist in emerging African economies. The results of this study therefore have important implications for international trading, international portfolio diversification, and asset pricing and financial risk management. [ABSTRACT FROM AUTHOR]

Our study examines the impact of government stimulus spending on the US dollar's exchange rate. We apply the VECM model on US data from 1980 to 2020 with US dollar's exchange rate as the dependent variable and the quantity of domestic money supply, amount of domestic government purchases, quantity of money supplied by the foreign country (China), and the foreign country's output as independent variables. Our study finds that, while the long-run impact of US fiscal stimulus spending on the dollar's exchange rate is negative, it has no effect in the short run. Also, the coefficient associated with the errorcorrection term, ECT, is negative but insignificant at 5% significance level, which implies that any shortterm fluctuation in the US dollar's exchange rate will not be adjusted toward its long-run value. [ABSTRACT FROM AUTHOR]

The purpose of this study is to see how much inflation-interest and exchange rates could affect profitability and or whether the correlation-between profitability affects the corporate's book value. The research sample consisted of seven large Indonesian national banks with authorized capital above 10 trillion rupiahs with an observation period from 2014 to 2019. Data processing using Eviews 9 software, quantitative using regression linear multiple regression techniques. They indicate that inflation does not have a significant positive impact which is proxied by profitability. Interest rates have a positive but not significant to Profitability, Value Exchange does not have a positive effect significantly on Profitability and Profitability has a significant positive influence on the Corporate's Book Value. [ABSTRACT FROM AUTHOR]

The significance, nature, and direction of the effect of inflation on economic growth and macroeconomic stability are contentious both in theory and empirical analysis. This paper examines the causal relationship between inflation and macroeconomic variables - interest rate, exchange rate, money supply, GDP, and fiscal deficit - in India, during the period 1986 to 2016, applying the vector correction (VECM) estimation method. The macro variables are stationary at first difference, and a cointegrating and causal relationship exists between the wholesale price index and interest rate, exchange rate, GDP, broad money, and gross fiscal deficit. The VECM estimates reveal that money supply and GDP are the most important macro variables in explaining the variations in inflation. The estimated error correction term shows that the shortrun disequilibrium is corrected by about 20% every period towards the long-run equilibrium. The impulse response results show that inflation responds positively to the money supply from the start to the 9th period. To promote economic growth and keep inflation low, money supply and budget deficits need to be rationalised. [ABSTRACT FROM AUTHOR]

Purpose: In this paper, the authors study the long-run determinants of total factor productivity (TFP) in three major European economies over the period 1983–2017, namely Germany, France and Italy. Design/methodology/approach: The authors focus on the capital misallocation effects, scale effects and labor misallocation effects. To this end, the authors study how real interest rate shocks, real exchange rate shocks, real wage shocks and changes in labor regulation affected TFP in major European countries over the last decades. The authors employ a theoretical and an empirical model to investigate the issue. The empirical results are obtained using a VAR model for estimation. Findings: A stripped-down model of labor market in open economy with technology progress allows to identify the relevant variables affecting TFP. On the empirical ground, the authors find a positive relationship between TFP and real interest rate in the long run. Importantly, the authors detect a positive relationship between TFP and real exchange rate. Further, the authors show that the TFP can respond positively to a stricter labor market regulation and to a higher real compensation per employee. The results provide support to the idea that TFP has a positive relation with prices in the long run, while it may be biased along the cycle because of price rigidity. Research limitations/implications: The present model is stylized and may not capture all of the details of reality. The analysis should be extended to a larger number of countries. Technology progress could be proxied using different variables, as the R&D expenditure or the number of patents. Micro data, for specific sectors and industries, can improve the quality of the empirical investigation. Practical implications: Mainly the authors find that TFP has a positive relationship with price changes in the long run, while it may be biased along the cycle because of price stickiness. Capital misallocation and labor misallocation can negatively affect TFP. Thus, the observed divergences in European TFP can be traced back to the misallocation effects attributable to the decrease of real interest rate and real wages, together with the raising labor flexibility. Mainly, the authors detect a positive long-run relationship between TFP and real exchange rate. This outcome strengthens the supply-side view of the relationship between productivity and real exchange rate. Social implications: The authors believe that the present setup can be helpful to reflect critically on the nodes at the core of the productivity slowdown and asymmetries in the eurozone. The aim is to implement renewed policies in order to favor economic growth, convergence and stability in the euro area. Originality/value: This research addresses the issue of asymmetries among European economies by focusing on the role played by real prices in the long run. Traditionally, the dynamics of TFP have been attributed only to technological components, human capital and knowledge. This work shows that the dynamics of prices such as the real interest rate, the real exchange rate and the real wage can also influence the technological process by pushing the production system toward choices that are not always optimal for economic growth. An interesting result of this research concerns the positive relationship between real exchange rates and TFP in the long term, evidence of an important supply-side effect on the technological process. [ABSTRACT FROM AUTHOR]

This study aims to analyze some factors that can affect Return on Assets (ROA) which have implications for Stock Return. The analysis model of this study uses panel data regression with samples from each countrysuch as Indonesia and Malaysia as many as 10 banks that have large total assets of the banking companies’ population listed in the capital markets of each country in the period of 2013-2017. The results of research on exogenous variables in the first research model of the banking industry in Indonesia, Capital Adequacy Ratio (CAR), Loan To Deposit Ratio (LDR), Non Performing Loans (NPL) hadno partially significant effecton ROA. Net Interest Margin (NIM), Operational Costs on Operational Revenues (BOPO), Interest Rate, Exchange Rate (Rate)had a significant effect on ROA. In the second research model in Indonesia, the Capital Adequacy Ratio (CAR), Loan ToDeposit Ratio (LDR) had no partially significant effect on Stock Returns. NonPerforming Loan (NPL), Net Interest Margin (NIM), Operational Costs on Operational Revenues (BOPO), Interest Rate, Exchange Rate (Rate), had a partially significant effect on Stock Return, and Intervening Variable ROA had a significant effect or mediating on Stock Return. The research results on exogenous variables in the first research model of the banking industry in Malaysia, CAR, BOPO, Interest Rate, and Exchange Rate did not have a partially significant effect on ROA. In the second research model in Malaysia, CAR, LDR, NIM, BOPO, Interest Rate, and Exchange Rate had a partially significant effect on Stock Return, whilst NPL had no significant effect on Stock Returns as well as Intervening Variable ROA did not mediate on Stock Returns. [ABSTRACT FROM AUTHOR]

A vast literature exists on the determinants of inflation in developed countries whereas the one in emerging markets and developing countries has gained attention at the beginning of 1990s. In this respect, the current paper overviews the empirical studies in order to provide underlying knowledge and common facts on this topic that are valuable for further research and policymakers. The patterns emerge from the results of the existing literature can be summarized as follows. First, inflation is mainly a monetary phenomenon either due to direct or indirect drivers in these countries. However, the significance of the effects from the monetary aggregates are dependent on the countries and periods under study. Secondly, inflation persistence is a major determinant in explaining inflation, suggesting a backward-looking behavior in inflation dynamics for these countries. Lastly, the importance of domestic determinants in understanding inflation has shifted towards external ones implying a greater role for global determinants in the last two decades. [ABSTRACT FROM AUTHOR]

This paper employs a five-variable monetary policy transmission model within a structural vector error correction (SVEC) modelling framework for Thailand to examine the relative contributions of the policy interest rate and a monetary aggregate of real output and prices. The model is estimated using quarterly data for the 2000Q2-2019Q4 period after imposing both short- and long-term restrictions. The empirical results suggest that the policy interest rate and the monetary aggregate contribute significantly to the forecast-error-variances of real output and prices, irrespective of whether the policy interest rate or the monetary aggregate appears to be the lead variable. That a shock to the money stock contributes to real output and to prices, whether treated as a policy instrument or as an endogenously determined variable within a generalized macroeconomic system, is consistent with the implication of classical monetary theory, which suggests the existence of a long-run equilibrium relation among money, real output, prices, interest rates and exchange rates. The results also support a co-integral relation among the four variables in Thailand. A major policy implication is that an injtation-targeting central bank such as the Bank of Thailand can deploy a monetary aggregate as a monetary policy instrument, particularly in a low inflation environment. [ABSTRACT FROM AUTHOR]

In the literature, there are studies which conclude that interest rates have either positive or negative effect on exchange rates during financial crises in emerging markets. These results are in accordance with the traditional or revisionist views respectively. However, in the literature, there are also researches which result in interest rates not having influence on exchange rates, signalling that there might be an alternative to these two approaches. In this study, it is investigated whether interest rates can be cause of exchange rates by taking stock market into consideration and using the data of 2001 financial crisis in Turkey. In the analysis, ARDL co‐integration, VECM and Granger causality methods are applied and it is reached that the relationship was from stock market and exchange rates to interest rates, not vice versa. [ABSTRACT FROM AUTHOR]

It has been determined that given the same factors of production, bank regulation of macroeconomic processes can lead to sustainable economic growth with inflationary self-regulation of market equilibrium and a catastrophic economy decline with deflationary self-regulation of market equilibrium. It is impossible to regulate the amount of money in circulation by simultaneously changing the interest rate and the exchange rate, because they are functionally dependent. There is a marginal interest rate, after which it is impossible to carry out foreign exchange transactions due to a reduction of cash in circulation through negative foreign currency. The exit of the economy from recession or depression through inflation can significantly increase the production factors. [ABSTRACT FROM AUTHOR]

This paper examines the effect of interest rates on exchange rate volatilities in Ghana. It utilizes the Quarterly Time Series dataset spanning 2000 Quarter 1 to 2017 Quarter 2 and the Autoregressive Distributed Lag model as well as the Vector Error Correction Model to investigate the long-run and short-run relationships between the variables. The results showed that in the long-run model, exchange rate volatility was seen to be influenced by money supply, inflation, Central Bank's policy rate, and the Ghana Stock Exchange composite index. However, in the short-run model, exchange rate volatility was found to be significantly influenced by its past values and the Central Bank's policy rate. [ABSTRACT FROM AUTHOR]

The prevailing exchange rate and its volatility has been always an important issue in an open economy and freely floating exchange rate system, such as in Indonesia. In this system, the exchange rate is allowed to fluctuate based on the interaction between demand for and supply of foreign currency in the foreign exchange market. Its fluctuation may influence many economic activities and can be transmitted to the inflation rate. This shows that the prevailing exchange rate and its volatility become a crucial variable that must be taken into account by all economic actors. This paper aims to describe the application of asset approach in determining the equilibrium exchange rate Rupiah against US$ and analyze the factors that influence its volatility. The analysis method used is the applied method based on the theory of Uncovered Interest Parity (UIP) condition. The result shows that the actual exchange rate is completely different from the equilibrium exchange rate where Rupiah is undervalued towards US$. It reflects that the demand for US$ is greater than its supply which means that foreign exchange market is not in equilibrium. When all else equal, a decreasing of Rupiah interest rate, an increasing of US$ interest rate and a rising of expected future exchange rate, respectively, will depreciate Rupiah against US$. The changing of these three factors can show and describe clearly its effect on the volatility of exchange rate. [ABSTRACT FROM AUTHOR]

The study examined the impact of interest rate and economic growth as determinant of the firm’s investment decision in Nigeria between the period of 1989 and 2019. The study disaggregated interest rate and economic growth into external borrowing, exchange rate, inflation rate, and gross domestic product in line with the predicated theories reviewed. The data were obtained from the Central Bank of Nigeria Statistical Bulletin. Based on the mixed level of stationarity of the variables as revealed by the unit root test, the study made use of the auto-regressive distributed lag (ARDL) technique to analyze the data. The bound test revealed that; there was the presence of co-integration (long-run relationship) among the dependent and all the explanatory variables consequently the study estimated the ARDLECM. The findings from the result point to a unique long-term relationship between interest rates, external borrowing, exchange rate, and economic growth. The result also revealed that there is no strong empirical evidence that there is a link between the interest rate and investment decisions in Nigeria. It was concluded that as a prerequisite for economic growth, the government must embark on growth-enhancing reforms and be tender to the behavior of interest rates in the economy. This will guide the formulation of private sector development policy as an enabler of global economic growth in Nigeria. [ABSTRACT FROM AUTHOR]

Hot money flows refer to short-term foreign currencies entering the country's economies through short-term loans and portfolio investments. The purpose of the study is to determine the impact of hot money flows in Turkey on stock exchange index, exchange rates and interest rates. For this purpose, BIST-100 Index closing values, US dollar exchange rates and five-year Treasury bond interest rates were considered to explain hot money data. The data are in an annual frequency and the analyses were made for the period between 1989 and 2019. The structural equation model was applied in the study. The model fit index values that helped to determine the success rate of the established model was examined before passing on to the analysis. According to the model fit index values, it was determined that the model was compatible with the data. It was found that hot money has a positive effect on the stock exchange index and a negative effect on interest rates and exchange rates. [ABSTRACT FROM AUTHOR]

This paper sought to examine the impacts of the exchange rate and interest rate volatility on stock market returns within the economies of three major African countries namely, Ghana, Nigeria and South Africa using Exponential General Autoregressive Conditional Heteroscedasticity (EGARCH) and Threshold GARCH (TGARCH) also known as GJR-GARCH estimation methods. We find a positive shock to interest rate and exchange rate lead to persistence rise in the price levels over the 60-month horizon. We find the majority of coefficients are positive compared to negative coefficients. Our results indicate that response asymmetries of positive and negative impact interest rate and exchange rate changes on all stock market returns. Overall, country-analysis suggests that coefficients of interest rate and exchange rate for Ghana are typically negative. Both GJR-GARCH and EGARCH methods show that good news has an impact on volatility more than bad news under different assumptions. [ABSTRACT FROM AUTHOR]

This paper investigates the predictive power of world oil and precious metal price for exchange rate (BDT/US dollar) and interest rate movements using monthly data spanning from January 1990 to April 2016. Using a structural VAR with identification restriction, our impulse response and variance decomposition analysis suggest that oil price has a significant influence in forecasting both exchange and interest rate in short-run. Whereas, precious metal (i.e. gold and silver) price tends to display overshooting behavior on interest rate in both short and long horizons. This evidence also suggests that shocks to exchange rate account for a substantial share of fluctuations in interest rate. The findings offer major quantitative evidence for central bank policy makers, investors, hedge and portfolio managers. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to analyse the long-term nature of the interrelationship between interest rate and exchange rate. Design/methodology/approach: By employing Mexican data, the authors estimate a non-linear autoregressive distributed lags (NARDL) model to investigate the nature of the changes and the interaction between interest rate and exchange rate in response to monetary authorities' actions. Findings: The results show that, contrary to simplistic predictions, the real exchange rate causes the real interest rate in an asymmetric way. The bounds testing approach of the NARDL models suggests the presence of co-integration among the variables and the exchange rate variations appear to have significant long-run effects on the interest rate. Most importantly, these effects are asymmetric and positive variations in the exchange rate have a lower impact on the interest rate. It is also interesting to report that the reverse is not true: the interest rate in the long-run exerts no statistical significant impact on the exchange rate. Practical implications: The asymmetric long-term relationship between real exchange rate and real interest rate is evidence of why monetary authorities are reluctant to free float exchange rate. In Mexico, as in most developing countries, monetary policy strongly responds to exchange rate movements because these have relevant effects on commercial trade. Moreover, in dollarized economies these effects are stronger because of pass-through impacts to inflation, income distribution and balance-sheet equilibrium (the well-known "original sin"). Originality/value: Under inflation targeting and flexible exchange rate regime, despite central banks pursue the control of short-term interest rate, in the long-run one could observe that it is the exchange rate that influences the interest rate, and that this reverse causality is stronger in emerging economies. This paper contributes by analysing the asymmetric relationship between the variables. [ABSTRACT FROM AUTHOR]

In the present paper, we investigate the effects of the disagreement in expectations about exchange rate on the disagreements in expectations about inflation and about monetary policy interest rate in Brazil. The analysis seeks to verify whether the uncertainty related to the future behavior of the exchange rate affects both the process of inflation expectation formation and the process of monetary policy interest rate expectation formation. Besides, the paper investigates the role of monetary policy credibility in mitigating the effects of the disagreement in expectations about exchange rate on the disagreements in expectations about inflation and about monetary policy interest rate. The results indicate that the disagreement in expectations about exchange rate impacts the disagreements in expectations about both inflation and monetary policy interest rate. In addition, the findings indicate that credibility is capable of mitigating the transmission of uncertainties about the exchange rate to uncertainties about the inflation rate and the monetary policy interest rate. Thus, our estimates reveal that (i) the marginal effect of disagreement in expectations about exchange rate on the disagreement in expectations about inflation decreases with the level of credibility and, (ii) the marginal effect of disagreement in expectations about exchange rate on the disagreement in expectations about monetary policy interest rate decreases as credibility increases. [ABSTRACT FROM AUTHOR]

The study examines the impact of changes in interest rate and exchange rates and their unexpected changes on industry and size portfolio returns on the Ghana Stock Exchange (GSE) controlling for the 2007/2008 financial crisis. Three main exchange rates (FX) namely, Ghana cedis (Gh¢)/US dollar, Gh¢/Great Britain Pounds (GBP) and the Gh¢/Euro are used. We use OLS, GARCH and ARIMA in our estimations. The study found that only depreciation of the Gh¢/USD reduces the returns of financial stocks and large firms. There is a direct positive impact of the financial crisis on the returns due to investment shift from developed markets where crisis occurs. Variations in the returns are mostly explained by the market index returns (RM), which has a positive impact. However, we find that the positive impact of RM on the portfolio returns (finance, medium and large portfolios) is reduced during the financial crisis. The results largely reveal that shocks to the conditional variance are highly persistent and the response of volatility decays at a slower rate. [ABSTRACT FROM AUTHOR]