Download or read book The Effect of Inflation Interest Rates and Exchange Rates on Stock Prices Comparative Study Among Two GCC Countries written by Mahfoudh Hussein Mgammal and published by . This book was released on 2018 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main purpose of this paper is to investigate whether stock prices and exchange rates are related to each other or not. Both the short term and the long term association between these variables are discovered. The study applies monthly and quarterly data on two gulf countries, including Kingdom Saudi Arabia (KSA) and United Arab Emirate (UAE) for the period January 2008 to December 2009. The results of this study in the short term found that the exchange rate influence positively on the stock market price index for United Arab Emirate and there is no association between them for Kingdom Saudi Arabia. Moreover the study in the long term found that the exchange rate influence negatively on stock market price index for the United Arab Emirate. While no association between these variables in Kingdom Saudi Arabia.

Download or read book Studying the Relationship Between Stock Prices and Exchange Rates in a Sample of Arab Countries written by Linda Ismaiel and published by . This book was released on 2014 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study aims to explore the nature of the relationship between stock prices and exchange rates in a sample of Arab countries that are facing political crises, those being: Syria, Tunisia, Egypt, and Bahrain. It applies monthly time series data of the nominal and real effective exchange rates and stock prices indices for the sample countries from January 2003 to July 2013. The study utilises the Johansen cointegration test, the Vector Error Correction Model (VECM), and the Granger causality in order to test the long run and short run dynamics between the two variables of interest. The results reveal that there is no short run or long run relationship between stock prices and exchange rates in Tunisia, this holds regardless of whether the nominal or the real effective exchange rate is used; however, for the rest of the countries, the results differ according to the period of study and the measure of exchange rate that has been used. Overall, the post crisis period produced different results than the pre crisis one, and the real effective exchange rate produced different results than the nominal one. Most of the results, except those related to Tunisia, have important implications for investors and policy makers.

Download or read book The GCC Monetary Union written by Mr.S. Nuri Erbas and published by International Monetary Fund. This book was released on 2003-04-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We compare the dollar peg to a dollar-euro basket peg as alternative exchange rate regimes for the incipient Gulf Cooperation Council (GCC) currency union. Quantitative evidence suggests basket peg does not dominate dollar peg for improving external stability. However, as GCC exports and external financial assets become more diversified, a more flexible exchange policy may be necessary for competitiveness and stability. Pegging the prospective common GCC currency to a basket, like the dollar-euro basket, may provide a conservative transitional strategy toward a more flexible exchange rate policy.

Download or read book Monetary Policy Transmission in the GCC Countries written by Mr.Raphael A. Espinoza and published by International Monetary Fund. This book was released on 2012-05-01 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: The GCC countries maintain a policy of open capital accounts and a pegged (or nearly-pegged) exchange rate, thereby reducing their freedom to run an independent monetary policy. This paper shows, however, that the pass-through of policy rates to retail rates is on the low side, reflecting the shallowness of money markets and the manner in which GCC central banks operate. In addition to policy rates, the GCC monetary authorities use reserve requirements, loan-to-deposit ratios, and other macroprudential tools to affect liquidity and credit. Nonetheless, a panel vector auto regression model suggests that U.S. monetary policy has a strong and statistically significant impact on broad money, non-oil activity, and inflation in the GCC region. Unanticipated shocks to broad money also affect prices but do not stimulate growth. Continued efforts to develop the domestic financial markets will increase interest rate pass-through and strengthen monetary policy transmission.

Download or read book Three Essays on Financial Markets and Monetary Behavior in GCC Countries written by Sami Z. Alabdulwahab and published by . This book was released on 2008 with total page 117 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains three studies discussing the financial market returns' volatility spillover, optimal currency union, and source of real exchange rate fluctuations in Gulf Cooperation Council countries (GCC) 1 . This study will give insight into economic integration among these countries in different perspectives. First, the transmission of stock returns and volatility among GCC stock markets is discussed through an investigation into how these markets' returns are correlated. Covering the period between 2001 and 2005, this study uses daily index returns in each market and analyzes the correlation direction of returns by using a simultaneous multivariate GARCH method. In all cases there are significant direct and indirect relationships between Saudi and Kuwait stock markets in their second moments. Second, the optimal currency union study discusses the opportunity of GCC countries to adopt one currency. The VAR method is the popular method used to uncover the underlying shocks among these countries. The variables that are used in this study will be oil price, GDP growth, and CPI. The model requires two assumptions in additional to the basic VAR's assumptions. The first assumption is that there is no long-run effect of all shocks on oil price except oil shock. The second assumption is that there is no long-run effect of demand shock on GDP growth. The study uses yearly data from 1963 to 2006. There are low correlations among the oil, supply, and demand shocks. The variance decomposition analysis declares that oil shocks play a major role in explaining the movements of the GDP for all GCC countries except Oman in the long-run. Third, the study of the source of real exchange rate fluctuations explores the sources of real exchange rate fluctuations in GCC countries. The purpose of this study is to clarify to what extent the monetary authority can control real exchange rate fluctuation given their fixed nominal exchange rates. The study starts with decomposing real exchange rate fluctuations into real and nominal shocks. To do this, the study uses a structural VAR model, which assumes that nominal shocks have no long-run effect on the real exchange rate. Then it applies a larger structural VAR containing oil price, oil output, the real exchange rate, and the price level. The study uses quarterly data running from 1980 to 2006. The model suggests that all shocks have no long-run effect on oil prices except oil shocks. Furthermore, real and nominal shocks have no long-run effect on oil production. However, the specific results of this study vary from country to country since some of these countries have low dependence on oil income.

Download or read book The Relevancy of the US Dollar Peg to the Economies of the Gulf Cooperation Council Countries GCC written by Qais Issa Al Yahyaei and published by . This book was released on 2010 with total page 427 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dynamic Relationship Between Stock Prices and Exchange Rates in Asia written by Fauziah Ifa and published by LAP Lambert Academic Publishing. This book was released on 2016-01-04 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are two different and conflicting models to determine the relationship between exchange rate and stock prices. The first model, "Flow-Oriented" states that currency or exchange rate changes affect the competitiveness of a company, which in turn affect the company's revenues or cost of funds and the subsequent impact on the company's stock price. Meanwhile, according to the two models namely "Stock-oriented" which emphasizes the role of capital account transactions stated that the rise in stock returns (rising stock market) would attract capital flows which in turn will increase the domestic money permintaanmata and cause exchange rate to appreciate. Therefore, this study was conducted to determine if there cointegration and causality relationship between exchange rates and stock prices in Asia. The objects of this study are Indonesia, Singapore, Taiwan, Malaysia, China, South Korea, Japan, Hong Kong, Thailand, and India with the study period January 2009 to December 2013. Data used are secondary data in the form of monthly data from the foreign exchange market (exchange rate) and capital markets (stock index).

Download or read book Asset Prices and Consumer Inflation in GCC Countries written by Almukhtar S. Al-Abri and published by . This book was released on 2015 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies the interactions between credit, financial asset prices (namely equity prices), and consumer price inflation for the countries belonging to the Gulf Cooperation Council using quarterly observations from 1998:1 to 2009:4. The stock price is seen to have a positive and significant effect on CPI inflation only in the case of Qatar and Oman. Domestic credit comes out as an important determinant of inflation in the GCC countries. Oil price increases affect inflation positively in Oman and Kuwait and negatively in Saudi Arabia. The findings suggest a varying degree of wealth effect on aggregate demand in these countries. The findings of this study have important policy implications for the challenges of a common monetary policy for the GCC area mandated by the proposed common currency.

Download or read book The Impact of Macro Economy on Stock Price Index written by Embun Prowanta and published by . This book was released on 2017 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - The objective of the study is to empirically investigate the relationship between macroeconomic variables as Gross Domestic Product (GDP), inflation, interest rates, exchange rates, foreign exchange reserves, current accounts and export-import towards the stock price index. Methodology/Technique - The data used is monthly data for macroeconomic and the stock price index of five ASEAN countries including Indonesia, Malaysia, Singapore, Thailand and the Philippines from 2006 to 2015. The analysis uses a regression estimation of panel data and a series of chow tests i.e. the Hausman test and the LM test as the selection process, with the aim of determining the macroeconomic variables that could significantly affect the stock price index of five ASEAN countries. Findings - The result show that of the seven macroeconomic variables affecting the stock price index, only four macroeconomic variables showed a significant effect. These are GDP, interest rates, exchange rates, and inflation. Meanwhile, three other variables (foreign exchange reserves, current accounts and export-import) did not show a significant effect. Novelty - The study looked at the effect of deregulation on stock markets, focusing on variables that significantly influence the stock price index.

Download or read book Estimation and Forecasting of the Dynamic Relationship Between Stock Prices and Exchange Rates written by Khadija Marseet and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Gulf Cooperation Council Countries GCC written by Samya Beidas-Strom and published by . This book was released on 2011-10-02 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Departmental papers are usually focused on a specific economic topic, country, or region. They are prepared in a timely way to support the outreach needs of the IMF’s area and functional departments.

Download or read book Monetary Policy Transmission in Emerging Markets and Developing Economies written by Mr.Luis Brandao-Marques and published by International Monetary Fund. This book was released on 2020-02-21 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.

Download or read book Nonperforming Loans in the GCC Banking System and their Macroeconomic Effects written by Mr.Raphael A. Espinoza and published by International Monetary Fund. This book was released on 2010-10-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: According to a dynamic panel estimated over 1995 - 2008 on around 80 banks in the GCC region, the NPL ratio worsens as economic growth becomes lower and interest rates and risk aversion increase. Our model implies that the cumulative effect of macroeconomic shocks over a three year horizon is indeed large. Firm-specific factors related to risk-taking and efficiency are also related to future NPLs. The paper finally investigates the feedback effect of increasing NPLs on growth using a VAR model. According to the panel VAR, there could be a strong, albeit short-lived feedback effect from losses in banks’ balance sheets on economic activity, with a semi-elasticity of around 0.4.

Download or read book Impact of the Global Financial Crisis on the Gulf Cooperation Council Countries and Challenges Ahead written by Ms.May Y Khamis and published by International Monetary Fund. This book was released on 2010-07-21 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Departmental papers are usually focused on a specific economic topic, country, or region. They are prepared in a timely way to support the outreach needs of the IMF’s area and functional departments.

Download or read book Stock Markets in Islamic Countries written by Shaista Arshad and published by Springer. This book was released on 2016-12-22 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores the volatility, efficiency and integration of stock markets in Islamic countries. It presents recent trends, growth and performance, before moving on to explore how patterns change during different business cycles for short-term and long-term investors, and ranks the efficiency of the various markets. It addresses how the level of market integration has been affected during different economic periods, and concludes by summarising the performance of the stock markets, suggesting potential future directions for these markets.

Download or read book Global Implications of Lower Oil Prices written by Mr.Aasim M. Husain and published by International Monetary Fund. This book was released on 2015-07-14 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The sharp drop in oil prices is one of the most important global economic developments over the past year. The SDN finds that (i) supply factors have played a somewhat larger role than demand factors in driving the oil price drop, (ii) a substantial part of the price decline is expected to persist into the medium term, although there is large uncertainty, (iii) lower oil prices will support global growth, (iv) the sharp oil price drop could still trigger financial strains, and (v) policy responses should depend on the terms-of-trade impact, fiscal and external vulnerabilities, and domestic cyclical position.

Download or read book Monetary Issues in the Middle East and North Africa Region written by Mr.Simon Gray and published by International Monetary Fund. This book was released on 2013-05-10 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper documents the main themes covered in two seminars (December 2011 and September 2012) on monetary policy and implementation at the IMF—Middle East Center for Economics and Finance, and includes country case studies. Against the backdrop of the global financial crisis and swings in cross-border capital flows, operational frameworks have become more flexible, and liquidity management has impacted the relationship between the policy rate corridor and market rates. The balance sheet structure of central banks in the Middle East and North Africa (MENA) shows differences between oil exporters and others, while a few countries have exhibited notable changes since early 2011. Collateral now has a significant financial stability function. Although only one MENA country is part of the G20, implementation of the Basel III bank capital adequacy and liquidity rules will most likely impact banks’ way of doing business in MENA countries, even if indirectly.