Last edited by Samular
Tuesday, August 4, 2020 | History

4 edition of Implications of a US dollar depreciation for Asian developing countries found in the catalog.

Implications of a US dollar depreciation for Asian developing countries

Emma Xiaoqin Fan

Implications of a US dollar depreciation for Asian developing countries

by Emma Xiaoqin Fan

  • 132 Want to read
  • 31 Currently reading

Published by Asian Development Bank in Manila .
Written in English

    Places:
  • United States.,
  • Asia.,
  • Developing countries.
    • Subjects:
    • Devaluation of currency -- United States.,
    • Foreign exchange rates -- United States.,
    • Foreign exchange rates -- Asia.,
    • Foreign exchange rates -- Developing countries.,
    • Balance of payments -- United States.,
    • Balance of payments -- Asia.,
    • Balance of payments -- Developing countries.,
    • Economic stabilization -- Asia.,
    • Economic stabilization -- Developing countries.,
    • Dollar, American.

    • Edition Notes

      StatementEmma Ziaoqin Fan.
      SeriesERD policy brief ;, no. 11, ERD policy brief (Online) ;, no. 11.
      ContributionsAsian Development Bank.
      Classifications
      LC ClassificationsHC411
      The Physical Object
      FormatElectronic resource
      ID Numbers
      Open LibraryOL3389257M
      LC Control Number2004615450

      2 Asian economies and other developing countries. The United States became relatively more attractive to investors and so the pace of decline in the current account quickened with the extra.   Figure 1. Real exchange rate of some Latin American countries and China versus the US Dollar, Source: WDI database. To put it differently, it seems like Latin American countries reacted to trade and financial shocks more through changes in the real exchange rate than through changes in reserves and stabilisation funds.

        In contrast, the current account surplus of developing countries driven by the growing Asian economies and the oil producing countries moved from a deficit of US.   Depression treatment in developing countries should be “available, accessible, cheap, culturally appropriate, convenient, and non-stigmatizing.” 22 Large advances have made depression treatable for Maggie. And further progress is underway to make similar success stories for those in underdeveloped nations.

      implications for which of these two channels needs to be predominant. To study the impact of rebalancing on relative prices, we build on Obstfeld and Rogoff (), OR from now onwards. In their paper, OR develop a two-country endowment economy to quantify the magnitude of the real dollar depreciation vis-a-vis the rest of the world associated`. Dramatic economic growth in Asian countries in the latter half of the 20th century was primarily due to. suppose the Federal Reserve increases the money supply of the United States, which leads to an increase in inflation. the dollar would: Depreciate in value relative to other currencies; Appreciate in value relative to other currencies.


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Implications of a US dollar depreciation for Asian developing countries by Emma Xiaoqin Fan Download PDF EPUB FB2

Implications of a US Dollar Depreciation for Asian Developing Countries Emma Xiaoqin Fan November Emma Fan is an Economist at the Economics and Research Department. The author expresses gratefulness for the comments and suggestions from Ifzal Ali, J.P.

Verbiest, Ernesto M. Pernia, Douglas Brooks, Cindy Houser, and Jesus by: 2. Given the dependence of Asian developing member countries on the US market, it is useful to consider the likely ramifications of a substantial dollar depreciation.

This brief focuses on the trade and macroeconomic policy implications. The US dollar Cited by: 2. BibTeX @MISC{Fan02implicationsof, author = {Emma Xiaoqin Fan and Emma Xiaoqin Fan}, title = {Implications of a US Dollar Depreciation for Asian Developing Countries}, year = {}}.

The United States dollar fell to historic lows Many emerging and developing countries are tightening monetary policies The value of the United States dollar continued to fall in April against a. Currency depreciation in one country can spread to other countries.

Recent Example of Currency Depreciation—Turkish Lira Turkey’s currency. Numerous arguments have been proposed to explain overshooting, including financial speculation, depreciation of the United States (US) dollar, low interest rates, and reductions in grain stocks.

A huge depreciation of dollar may reduce the deficit, but at the expense of particularly Canada, Mexico, Japan and euro countries in as much as the currencies of these countries are supposed to.

But Southeast Asian governments were unwilling to delink their currencies from the dollar. This absence of currency risk, and the large spread between high domestic interest rates and low U.S. dollar rates, encouraged foreigners to lend and local companies to borrow dollars for the short-term. Except when many currencies are devalued at the same time--as they were in September and to a much less extent in November (when over a dozen countries devalued with the pound) and August (when fourteen French African countries devalued their currencies along with the French franc)--a currency devaluation against the dollar is.

The country must have lots of dollars on hand to maintain this peg. As a result, most of the countries that use a U.S. dollar peg have significant exports to the United States. Their companies receive lots of dollar payments. They exchange the dollars for local currency to pay their workers and domestic suppliers.

A dollar depreciation lowers the foreign-currency prices of U.S. made goods and services, making our exports more attractive to foreigners.

The resulting increase in foreign demand for U.S.-made traded goods raises their dollar prices. Similarly, a dollar depreciation increases the dollar prices of foreign-made goods and services. The Asian financial crisis was a series of currency devaluations and other events that spread through many Asian markets beginning in the summer of   The depreciation is harmful for US companies, as the cash repatriated back from the Asian countries would reduce due to the weaker value of in relation to dollar.

3 types of exposure Transaction exposure: One obvious way in which most MNCs are exposed to exchange rate risk is through contractual transactions that are invoiced in foreign currencies.

Indian Rupee vs US Dollar and other Emerging Market currencies. On 18 SeptemberIndian Rupee depreciated to against the US Dollar and there is a chance that it may further slide and fall as low as 75 against the US Dollar.

Forex Experts and economists claim that there are plenty of reasons for the decline. Yen depreciation: Some implications Japanese exports rose percent in US dollar terms, while imports contracted percent.

Japanese GDP in East Asian countries. For Japan itself, studies suggest that competitiveness gains from REER depreciation may be temporary and. Currency depreciation refers to the decline of the price of one currency against another.

If, for example, you could buy one euro for $ a week ago but must pay $ today, the dollar has depreciated against the euro. Such fluctuations in exchange rates significantly affect a wide range of companies.

countries to the developing world. The International Monetary Fund estimates net private capital flows into developing countries at nearly $ billion. A decade ago, an earlier surge of private capital to developing countries preceded a period of extreme financial turbulence, starting in Asia but spreading out to Russia and Latin America.

The. China directly affects the U.S. dollar by loosely pegging the value of its currency, the renminbi, to the dollar. China's central bank uses a modified version of a traditional fixed exchange rate that differs from the floating exchange rate the United States and many other countries use.

This book, edited by Paul Streeten, examines the ends and means of adjustment, aspects of trade policy, and lessons from the experience of South and East Asia, as well as comparing the debt situations of Asian and Latin American countries.

Unfortunately, the yen-dollar rate is beyond the control of Asia’s developing countries, or even of the major industrial powers, including Japan and the United States. One way for an Asian. Dollar Appreciation, Foreign Trade, and the U.S. Economy The U.S. economy has faced an unprecedented cu- mulative appreciation of the dollar against the curren- cies of the major industrial countries over the last two years.

The resulting loss of U.S. competitiveness from comparatively more expensive exports and less expensive imports has important implications for the.a dollar denominated deposit issued by a banking office located outside the United States. Appreciation of the dollar will tend to.

A depreciation of the dollar will tend to. the IMF may have given the wrong policy prescription to the Asian countries suffering from financial crises in and after because.In the Asian crisis of /98, some developing countries in the region experienced sudden stops and debt default.

Since then, many Asian developing countries have run sustained current account surpluses and built up sizable FX reserves as a buffer against sudden currency exchange rate depreciation.