Exchange rate regime switching in Malaysia and Singapore in response to China’s move to a basket peg: A DSGE analysis

Yoshino, Naoyuki; Kaji, Sahoko; Asonuma, Tamon

doi:10.1016/j.asieco.2016.08.006

Cited by 7 publications

(3 citation statements)

References 24 publications

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“…The flexibility of exchange rate policies plays a crucial role in buffering the domestic economy against external volatility. According to Yoshino et al [42], Ca'Zorzi et al [43], and Jalali-Naini and Naderian [44], a flexible exchange rate can support export competitiveness by facilitating necessary currency adjustments during external demand shocks. Similarly, Fernando [45], Rodríguez et al [46], and Shvets [47] find that proactive exchange rate interventions can prevent excessive currency appreciation and maintain export growth during periods of strong external demand.…”

Section: Literature Reviewmentioning

confidence: 99%

Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty

He,

Teng

2024

Mathematics

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The evolving global economic landscape necessitates adaptive monetary policies, especially for economies like South Korea that are deeply integrated with global markets. This research explores the strategic recalibrations of the Bank of Korea’s monetary policy amid fluctuations in global economic uncertainty. Utilizing a sophisticated microeconomic theoretical framework, this study employs Bayesian estimation techniques and impulse response analysis to dissect the dynamic effects of these global shocks on South Korea’s macroeconomic stability and policy direction. Our findings reveal that the Bank of Korea has adeptly navigated through turbulent economic conditions induced by external shocks through well-coordinated policy adaptations. These adaptations, which include both traditional and innovative monetary tools, have been crucial in stabilizing the financial environment and promoting economic growth. By detailing the tailored application of the Taylor rule within the Korean context and strategic foreign exchange interventions by the central bank, this study contributes significantly to the broader discourse on the efficacy of monetary policy in open economies and offers insights on integrating advanced analytical methods into economic policy analysis.

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Section: Literature Reviewmentioning

confidence: 99%

Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty

He,

Teng

2024

Mathematics

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“…There used to be a consensus among academic economists that currency interventions, while they might slow the movement of managed exchange rates (Yoshino et al, 2016), didn't really have an effective or lasting impact on exchange rates (Dominguez and Frenkel, 1993). Foreign exchange intervention was thought to have a potential role in stabilizing exchange rate volatility or smoothing out temporary fluctuations in the exchange rate, but such interventions were largely considered useless in "interfering with fundamental adjustments" (Mayer and Taniguchi, 1983).…”

Section: Do Such Interventions Work?mentioning

confidence: 99%

The effectiveness of foreign exchange interventions in Japan

Guyot,

Montgomery,

Sheng

2023

J Infrastruct Policy Dev

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This study informs the academic and policy debate on the policy effectiveness of exchange rate interventions on exchange rate levels and volatility. Using a constructed data set comprising daily data on exchange rates, monetary policy fundamentals, exchange rate intervention dates and magnitudes of those interventions as well as financial news speculation of such interventions, we empirically estimate the policy effectiveness of Bank of Japan interventions in the exchange rate over the 12-year period between 2010 and 2022. This allows us to investigate the policy effectiveness of a variety of exchange rate interventions, or news of exchange rate interventions, across different time-horizons. We find that policy interventions in the yen exchange rate are more effective over short-horizons than long-horizons, more effective when the policy objective is a competitive devaluation of the yen rather than a revaluation, and more effective at influencing the level of the yen against major world currencies other than the US dollar. In fact, for the yen-dollar rate, we find that policy interventions may have the unintended consequences of weakening the yen (when the policy intention is to strengthen it) and increasing volatility in the yen-dollar exchange rate.

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“…The effect of exchange rate volatility on global trade is a vital concern in business and economics (Bahmani-Oskooee & Aftab, 2017;Chi & Keow, 2016;Hall, Hondroyiannis, Swamy, Tavlas, & Ulan, 2010;Ouyang, Rajan, Li, Professor, & Kuan, 2016;Wong & Lee, 2016;Yoshino, Kaji, & Asonuma, 2016;Zakaria, 2013). The rationale for scrutinizing the influence of exchange rate instability on international trade is that such volatility brings ambiguity in global trades.…”

Section: Literature Reviewmentioning

confidence: 99%

Exchange rate volatility and financial performance of agriculture firms in Malaysia: An empirical analysis using GARCH, wavelet and system GMM

Reaz¹,

Mahat²,

Dahir³

et al. 2017

BEH

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The insurgence of exchange rate volatility over the years has gained the attention of not only scholars but also policy makers around the world. This paper investigates the influence of exchange rate volatility to the financial performance of agriculture firms in Malaysia. Authors use the system GMM dynamic panel techniques, wavelet coherence technique and GARCH (1, 1) for the period of 2001 and 2015. The findings show that the volatility of exchange rate of Malaysian Ringgit (RM) has a negative impact on the financial performance of agriculture firms in Malaysia. The ARME and AVA demonstrate a positive impact on the financial performance at 1% significance level for the full sample. The findings also reveal that financial performance, exchange rate, consumer price index, and interest rate comove while using the wavelet coherence.

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Exchange rate regime switching in Malaysia and Singapore in response to China’s move to a basket peg: A DSGE analysis

Cited by 7 publications

References 24 publications

Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty

Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty

The effectiveness of foreign exchange interventions in Japan

Exchange rate volatility and financial performance of agriculture firms in Malaysia: An empirical analysis using GARCH, wavelet and system GMM

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