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Currency Hedging : Managing Cash Flow Exposure
Alfaro, Laura; Calani, Mauricio; Varela, Liliana - National Bureau of Economic Research - 2021
relatively understudied. We study firms' currency risk exposure and their hedging choices by employing a unique dataset covering …, international trade, trade credits and foreign currency debt. We uncover four novel facts: (i) natural hedging of currency risk is … limited, (ii) financial hedging is more likely to be used by larger firms and for larger amounts, (iii) firms in international …
Persistent link: https://www.econbiz.de/10012585394
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The Effects of Industry Structure on Economic Exposure
Marston, Richard C. - 1996
in foreign currency. So the firm's hedging strategy is simple: sell foreign currency futures equal to the value of its … and its marginal cost in order to assess its exposure to exchange rates. So its hedging strategy also requires detailed …
Persistent link: https://www.econbiz.de/10012473341
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The Prudential Use of Capital Controls and Foreign Currency Reserves
Bianchi, Javier; Lorenzoni, Guido - National Bureau of Economic Research - 2021
We provide a simple framework to study the prudential use of capital controls and currency reserves that have been explored in the recent literature. We cover the role of both pecuniary externalities and aggregate demand externalities. The model features a central policy dilemma for emerging...
Persistent link: https://www.econbiz.de/10012696385
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Why has the yen failed to become a dominant invoicing currency in Asia? A firm-level analysis of Japanese Exporters' invoicing behavior
Ito, Takatoshi - 2010
It has been a well-known puzzle why the yen has not been used more in trade invoicing among Japanese exporters. Despite the yen's status as an only fully convertible currency in Asia, two patterns stand out as puzzling features of an excessively small share of yen invoicing: First, a strong...
Persistent link: https://www.econbiz.de/10012462424
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The Long or Short of it : Determinants of Foreign Currency Exposure in External Balance Sheets
Lane, Philip R. - 2009
A major focus of the recent literature on the determination of optimal portfolios in open-economy macroeconomic models has been on the role of currency movements in determining portfolio returns that may hedge various macroeconomic shocks. However, there is little empirical evidence on the...
Persistent link: https://www.econbiz.de/10012463739
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On the Rand : Determinants of the South African Exchange Rate
Frankel, Jeffrey - 2007
This paper is an econometric investigation of the determinants of the real value of the South African rand over the period 1984-2006. The results show a relatively good fit. As so often with exchange rate equations, there is substantial weight on the lagged exchange rate, which can be attributed...
Persistent link: https://www.econbiz.de/10012465604
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The Influence of Actual and Unrequited Interventions
Dominguez, Kathryn M.E. - 2007
Intervention operations are used by governments to manage their exchange rates but officials rarely confirm their presence in the market, leading inevitably to erroneous reports in the financial press. There are also reports of what we term, unrequited interventions, interventions that the...
Persistent link: https://www.econbiz.de/10012465703
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Is Numerairology the Future of Monetary Economics? Unbundling numeraire and medium of exchange through a virtual currency and a shadow exchange rate
Buiter, Willem H. - 2007
The paper discusses some fundamental problems in monetary economics associated with the determination and role of the numeraire. The issues are introduced by formalising a proposal, attributed to Eisler, to remove the zero lower bound on nominal interest rates by unbundling the numeraire and...
Persistent link: https://www.econbiz.de/10012465817
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International Reserves Management and the Current Account
Aizenman, Joshua - 2006
The paper assesses the costs and benefits of active international reserve management (IRM), shedding light on the question of how intense should IRM be for an emerging market. In principle, an active IRM strategy could lower real exchange rate volatility induced by terms of trade shocks; provide...
Persistent link: https://www.econbiz.de/10012465926
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Equivalence Results for Optimal Pass-Through, Optimal Indexing to Exchange Rates, and Optimal Choice of Currency for Export Pricing
Engel, Charles - 2005
Firms sometimes write price lists or catalogs for their exports, so they set prices for a period of time and do not adjust prices during that interval in response to changes in their environment. The firm sets the price either in its own currency or the importer's currency. This paper draws a...
Persistent link: https://www.econbiz.de/10012467476