Steady offering of the obtained currency has the impact of debilitating it in the foreign exchange markets. From the earliest starting point of 2005 to mid-2007, the Japanese yen deteriorated just about 21% against the U.S. dollar. The Bank of Japan 's target rate over that period ran from 0 to 0.50%; if the UIP hypothesis had held, the yen should have appreciated against the U.S. dollar on the premise of Japan 's lower interest rates
The Forecasting Power of the Volatility Index: Evidence from the Indian Stock Market Authors: Surya Bahadur G. C. Assistant Professor, School of Business, Pokhara University, Nepal Email: email@example.com Ranjana Kothari Assistant Professor, Amity University, Gurgaon, India Email: firstname.lastname@example.org Abstract Stock market volatility is a measure of risk in investment and it plays a key role in securities pricing and risk management. The paper empirically analyzes the relationship between India VIX and volatility in Indian stock market. India VIX is a measure of implied volatility which reflects markets’ expectation of future short-term stock market volatility. It is a volatility index based on the index option prices of Nifty. The study
Previous studies have discussed the role of interest rates in determining house price. The majority of these papers identify interest rates as the most important explanatory variable. One early study is Abraham and Hendershott (1992). Using pooled cross-sectional data on metropolitan house prices in the US between 1977 and 1991, they find that macroeconomic factors including interest rates and employment are significant in influencing house prices. Iacoviello and Minetti (2003) argue that, over time, house prices became more sensitive to interest rate changes due to financial liberalisation in European countries including the UK.
Therefore, SA should trade with all of them, but particularly, with Algeria. Because they have way more GDP contribution in industrial sector, which means, they are more progressed in industrial sector than SA. This supports that they have a high industrial skills and capabilities that SA should improve. SA trading with other African countries, is not only helping them and SA themselves economically, but also helping one another and encourage one another in order to improve the entire continent’s economy and its progress in the world’s economy. Therefore, I strongly suggest SA to be more proactive at trading with neighbor countries.
Hence, affecting other countries by reducing their surplus as deflation burdens spending power. Arguments for and against Floating Exchange rate The floating exchange or the flexible rate has been used by most countries. The flexible rate allows for independent monetary policies. Unlike fixed exchange rate that is based on gold standard and the metallic standard, floating exchange need no monetary officials to monitor account imbalances, it allows government to have freedom to obtain internal policies and objectives without the external restrictions. In addition, the floating rate is one that is flexible as the name also suggested.
(2006) found that the macroeconomic fluctuations are not fully judged by the New Zealand’s stock index. Beltratti and Morana (2006) had investigated the relationship between stock market and macroeconomic volatility using S&P data and found the causality direction runs from stock market to macroeconomic variables which is most strong than vice versa. Puah and Jayaraman (2007) had found that all variables show the long term relationship and stock prices are cointegrated with variables in Malaysian stock market. Liu and Shrestha (2008) found that the long relation exists among stock prices and the macrofactors in China stock market. It also explains that stock market has significant impact in the long run.
vii. Interest Rates: Interest rates in particular have a large bearing on the exchange rate of a country. When the interest rates on deposits are low, investors tend to prefer transferring their deposits to other countries that offer higher returns. This effect is clearly seen in the fluctuations of the exchange rate when there is a huge exodus of capital out of an economy and into another economy. The interest rates in the US have a strong effect on the exchange rate in India.
1.0 OVERVIEW OF SUMMARY (INCLUDES; BACKGROUND OF THE STUDY, OBJECTIVES, PROBLEM STATEMENTS) The impact of exchange rate shocks on household costs and expansion is typically condensed as far as a marvel called swapping scale go through, which is the impact that a changeless swapping scale stun of a given extent has on costs and swelling after some time. Present day conversion scale models accentuate monetary resource markets. An expansion in interest rate is important to settle the conversion standard devaluation and to check the inflationary weight and along these lines maintains a strategic distance from numerous unfriendly financial outcomes. A low inflation rate situation will show a rising cash rate, as the obtaining energy of the money