1,720,975 research outputs found
Effects of palm oil price on exchange rate: A case study of Malaysia and Indonesia
Get PDFThis paper investigates the impact of palm oil prices on exchange rates in Malaysia and Indonesia using the Dynamic Ordinary Least Squares (DOLS) model. The paper uses real monthly data from 1983:1 to 2015:5 and follows three estimation steps: (i) determination of the integrational properties of the data, (ii) testing for co integration relationship through bounds testing method, and (iii) estimating the long run impact of real palm oil price, real crude oil price and real interest rate differential on real
exchange rate. The finding indicates that real palm oil prices have significant negative
effects on real exchange rate. While coefficient estimates differ for Malaysia and Indonesia, however, they tend to be around 0.2. In other words, a 10% increase in the real price of palm oil leads to appreciation of about 2% in the equilibrium exchange rate in Malaysia and Indonesia. The findings confirm that an increase in palm oil price leads to exchange rate appreciation
Oil & natural resource economics
Get PDFThis paper surveys the history of the oil industry with a particular focus on the events associated with changes in the price of oil from the perspectives of oil production and oil reserves. The discussions include Hotelling’s theory on economics of non-renewable resource, peak oil theory, Hubbert’s curve and prediction on future oil production and reserves based upon the recent developments in the world supply of oil
SAFE HAVEN AND HEDGE PERFORMANCE OF USD AND GOLD IN ASEAN-6 EQUITY MARKETS
No full textInvestors in emerging ASEAN-6 equity markets face persistent challenges in identifying reliable safe-haven assets to protect portfolios during periods of heightened market volatility. Traditional safe havens, such as gold, may not consistently provide the expected protection in these markets, while the safe-haven role of the US dollar (USD) remains relatively underexplored. This study examines whether the USD and gold function as safe havens, hedges, or diversifiers for ASEAN-6 stock indices and evaluates their effectiveness within portfolio allocation strategies. Using daily data spanning 2013 to 2023, we estimate pairwise time-varying dependence between the USD, gold, and six ASEAN equity markets employing DCC-GARCH and dynamic copula models. The results indicate that the roles of the USD and gold vary across markets and over time. The USD consistently acts as a safe haven and a hedge, whereas gold’s role alternates between that of a hedge and a diversifier depending on market conditions. Portfolio allocation results further show that the USD is generally prioritized over gold, particularly in strategies focused on variance reduction and diversification maximization. Overall, the findings offer important insights for portfolio management and risk mitigation in emerging ASEAN equity markets
Exchange Rate Determinants: Is Crude Palm Oil Price One of Them in Malaysia and Indonesia?
Get PDFThis paper studies the relationship between palm oil prices, Malaysia Ringgit and Indonesia Rupiah exchange rates using Dynamic OLS method. The paper employs unit root with structural break tests and Pesaran (2001) bound cointegration technique based on real monthly prices ranging 6om January 1983 to May 2015. The
empirical results find negative and statistically significant evidence on the impact of real palm oil price changes on real exchange rates. The findings imply that increase in real palm oil price leads to real exchange rate
appreciation
Oil price & exchange rate: A comparative study between net oil exporting and net oil importing countries
Get PDFThe goal of this paper is to estimate the long run effects of real oil price and real interest rate differential on real exchange rate for a monthly panel of 8 countries from 1980 to 2008.The modeling exercise follows three steps.In the first step, the paper investigates the integrational properties of the data and finds them to be integrated of order one.In the second step, using several different panel cointegration tests, the paper finds evidence for cointegration among the three variables.In the third step, using pooled mean group estimator, the paper finds a positive and statistically significant impact of real oil price on real exchange rate for net oil importing countries, implying that increase in oil price leads to real exchange rate depreciation.In contrast, there is no evidence of long run relationship between real oil price and real exchange rate in a panel that consists of net oil exporting countries
Crude oil price and food security related variables in Malaysia
No full textObjective – This study analyzes the dynamic relationship between crude oil price and food security related variables (crude palm oil price, exchange rate, food import, food price index, food production index, income per capita and government development expenditure) in Malaysia using a Vector Auto Regressive (VAR) model. Methodology/Technique – The data covered the period of 1980-2014. Impulse response functions
(IRFs) was applied to examine what will be the results of crude oil price changes to the variables in the model. To explore the impact of variation in crude oil prices on the selected food security related variables forecast error variance decomposition (VDC) was employed.Findings – Findings from IRFs suggest there are positive effects of oil price changes on food import
and food price index. The VDC analyses suggest that crude oil price changes have relatively largest impact on real crude palm oil price, food import and food price index.This study would suggest to revisiting the formulation of food price policy by including appropriate weight of crude oil price volatility.In terms of crude oil palm price determination, the volatility of crude oil prices should be taken into account. Over dependence on food imports also needs to be reduced. Novelty – As the largest response of crude oil price volatility on related food security variables food vouchers can be implemented. Food vouchers have advantages compared to direct cash transfers since
it can be targeted and can be restricted to certain types of products and group of people. Hence, it can act as a better aid compared cash transfers.Type of Paper: Empirica
The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
Get PDFThe paper investigates whether the South African Inflation Targeting (IT) framework has performed the role of the nominal anchor in the economy or not as well as the process through which the monetary authority determine its monetary instrument in the economy. Using the Generalized Method of Moments (GMM) estimators, the baseline and augmented forward-looking monetary policy rules were estimated for the pre, post-IT adoption and full sample periods. The findings vary across regimes.The result prior to the adoption of the IT
framework does not follow the IT principles, whereas that of the post IT adoption and full
sample periods are characterized as a forward-looking IT rule.The paper further uses the
augmented monetary policy rule to identify the factors that determine the monetary policy
instrument in South Africa.The results confirm that the South African monetary economy practiced full-pledged IT principle immediately after the adoption of the IT framework and that the monetary policy rule serve as a nominal anchor for the South African economy.The policy implication is that the South African Reserve Bank should further strengthen the IT framework adopted in the economy in order to continue keeping inflation to the required single digit target
Oil price shocks: A comparative study on the impacts of oil price movements in Malaysia and the UK economies
Get PDFThe study investigates the relationship between changes in crude oil prices and Malaysia and the UK macro-economy. A multivariate VAR analysis is carried out among five key
macroeconomic variables: real gross domestic product, short term interest rate, real effective exchange rates, long term interest rate and money supply. From the VAR model, the impulse response functions reveal that oil price movements cause significant reduction in aggregate
output and increase real exchange rate. The variance decomposition shows that crude oil prices significantly contribute to the variability of real exchange rate long term interest rate in the Malaysia economy while oil price shocks are found to have significant effects on money
supply and short term interest rate in the UK economy. Despite these macro-econometric results, caution must be exercised in formulating energy policies since future effects of upcoming oil shocks will not be the same as what happened in the past. Explorations and development of practicable alternatives to imported fuel energy will cushion the economy from the repercussions of oil shocks
The corporate social responsibility overview.
Get PDFCorporate Social Responsibility (CSR) is a tool for companies to show their commitment towards social issues when the corporate involvement could strengthen the continuity and
company’s operation while at the same time to show their existence in the community. Essentially, CSR is corporate involvement in social activities in which their role is very
important to improve the quality of social life in terms of education, health and environmental sustainability
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