The present study intends to describe and analyze recent trends in foreign exchange markets, specifically the United States Dollar and the Euro relations as well as the fundamentals behind monetary assets. It brings to light the relationship between economic variables and monetary policy as well...

An alternative theoretical setting is presented to characterise the money demand and the monetary equilibrium. Two main hypotheses are stated that contradict the assumptions normally sustained by scholars and policy-makers: National output is assumed to be a random variable, and people are...

I had the pleasure to hear Dr. Soheil Mahmoodzadeh discuss his job market paper (Mahmoodzadeh & Gençay, 2015) recently at the University of Victoria Department of Economics seminar. The paper studies the effect of changes to tick size from pip to decimal pip for major currency pairs by the...

This text presents a study of various models based on jump processes in the context of foreign exchange (FX) rates modeling. Quality of FX rate log-returns fit is assessed for models such as Merton and Kou jump-diffusions, normal inverse Gaussian, variance gamma, and Meixner. The study is...

The aim of this article is to assess whether a fiscal sustainability indicator (FSI) can be used as an early warning indicator for predicting the probability that a currency crisis occurs. Using the FSI developed by Croce and Juan-Ramón (2003) and two different definitions of currency crisis, a...

The Central Bank of Barbados often intervenes – buys or sells from the foreign exchange (FX) reserves – to ensure the daily clearing of the FX market. This paper estimates an FX intervention function for Barbados using a dynamic complementary log-log model. Three general findings emerged:...

We looked into Pakistan’s central bank response to the foreign exchange inflows, for the period from 2001:01 to 2007:06, to strike a balance between competing goals of internal and external equilibriums to draw lessons for its conduct going forward. Using a reaction function we tested the...

Since mid-nineties, India’s foreign exchange reserves (FER) – both nominal and real adjusted for price level – started growing considerably and reached a new peak of US$ 251985 million in 2008-09. The fact that such unprecedented accumulation of FER build-up has materialized despite...

Though unambiguously outperforming all other financial markets in terms of liquidity, foreign exchange trading is still performed in opaque and decentralized markets. In particular, the two-tier market structure consisting of a customer segment and an interdealer segment to which only market...