International Economics By Robert J. Carbaugh 9th Edition

1. International EconomicsBy Robert J. Carbaugh9th Edition Chapter 12: Foreign Exchange

2. Foreign exchange Foreign exchange market • Satu tempat di mana individu, firma, dan bank membeli dan menjual mata wanga asing. • Pasaran di mana satu matawang ditukar dengan satu atau beberapa matawang negara lain. • E.g: New York, London, Tokyo, Hong Kong, Zurich, Frankfurt, Paris dll Carbaugh, Chap. 12

3. Fungsi Pasaran Pertukaran Asing • Sebagai penjelasan bayaran (payment clearance) antara negara • Menyediakan kredit kepada pengeksports dan pengimport. • Memberi kemudahan hedging (perlindungan nilai) untuk urusniaga hadapan. Carbaugh, Chap. 12

4. Peringkat-peringkat urusniaga Tukaran asing • Pertama: melibatkan pengeksport, pengimport, pelancong, pelabur dll – pengguna dan pembekal m/wang asing • Kedua: agensi kewangan (bank perdagangan dan pengurup wang – agensi penjelasan • Ketiga: broker tukaran asing. Bank perdagangan akan menyamakan aliran masuk dan keluar melalui broker tukaran asing • Keempat: bank-bank pusat antara negara (penjual dan pembeli terakhir) Carbaugh, Chap. 12

5. Foreign exchange Types of FX transactions • Spot transactions (urusniaga semerta) – jual dan beli matawang asing tidak melebihi 2 atau 3 hari (immediate delivery) selepas tarikh urusniaga. • Forward transactions (urusniaga hadapan) – perjanjian untuk jual atau beli mata wang pada masa hadapan, tetapi kadarnya ditentukan terlebih dahulu – maturity date > 2 atau 3 hari. • Currency swaps (matawang swaps) – perjanjian urusniaga mata wang sekarang, dan melakukan urusniaga semula pada masa hadapan, tetapi harga atau kadar dipersetujui pada peringkat awal. Carbaugh, Chap. 12

6. Foreign exchange markets Forward markets, futures & options • Forward contracts obligate buyer to buy or sell a certain amount of foreign currency at a future date • Usually made between banks and firms who expect to receive or make payments in foreign currency; the amount of currency and the date are set by the agreement Carbaugh, Chap. 12

7. Foreign exchange markets Forward markets, futures & options • Futures, traded on special exchanges, are contracts to trade given amounts of currencies at a specified date • Only a small number of major currencies can be so traded, and only in fixed lots with fixed trade dates Carbaugh, Chap. 12

8. Foreign exchange markets Forward markets, futures & options • Options provide the holder with the right (but not the obligation) to buy or sell foreign currencies at an agreed rate within a period of time, in return for a fee paid to the seller of the option • Options to buy are called call options, and those to sell are called put options • Options are frequently used to reduce risk from exchange rate changes Carbaugh, Chap. 12

9. Foreign exchange Foreign exchange quotations • Exchange rate is the price of one currency in terms of another. • E.g: Jumlah US yang diperlukan untuk membeli 1 pound UK • US$2 = 1 pound • Cross exchange rate between two currencies is calculated from their exchange rates with a third, benchmark currency - frequently the US dollar • 0.5 pound = US$1 • RM3.80 = US1 Carbaugh, Chap. 12

10. Foreign exchange Keseimbangan Kadar Pertukaran • Ditentukan melalui titik persilangan antara keluk DD dan SS mata wang asing • Keluk DD – kuantiti pound yg diminta • Cerun negatif – R rendah bermakna memerlukan US yang sedikit untuk beli pound. • P barang UK murah – import dari UK meningkat jadi DD pound tinggi • Keluk SS – kuantiti pound yang ditawar • Cerun positif – R rendah bermakna memerlukan US$ yang sedikit untuk beli pound. Penduduk UK terima US$ sedikit bagi setiap pound – US$ mahal • P barang US mahal – UK kurang import jadi SS pound rendah Carbaugh, Chap. 12

11. Foreign exchange markets Exchange rate determination Carbaugh, Chap. 12

12. One country’s currency has depreciatedwhen more of it is needed to buy a unit of a foreign currency (is worth less relative to the other currency) • Asal: US$2 = 1 pound • Baru: US$3 = 1 pound • A currency has appreciated when less of it is needed to buy a foreign currency (is worth more relative to the other currency) • Asal: US$2 = 1 pound • Baru: US$1.5 = 1 pound Carbaugh, Chap. 12

13. Pros Lower prices on foreign goods Keeps inflation down Foreign travel is cheaper Cons Exporters’ products become more expensive abroad Imports-competing firms face price competition Travel more expensive for foreign tourists Foreign exchange Impact of an appreciating US dollar Carbaugh, Chap. 12

14. Pros Exporters can sell abroad more easily Less competition for US firms from imports Foreign tourism is encouraged Cons Higher prices on imports Upward pressure on inflation Travel abroad more expensive Foreign exchange Impact of a depreciating US dollar Carbaugh, Chap. 12

15. Foreign exchange markets Exchange arbitrage • Involves taking advantage of exchange rate differences in different markets to make a profit • Kegiatan menjual beli matawang untuk mendapat keuntungan. • Membeli matawang di pusat kewangan yang murah dan jual di pusat kewangan yang mahal • Implikasi - Helps equalize exchange rates globally • 2 titik – melibatkan 2 matawang • 3 titik – melibatkan 3 matawang Carbaugh, Chap. 12

16. Premium Ke Hadapan (FP) • Kadar Hadapan (Forward rate/FR) lebih tinggi daripada kadar semesrta (Spot rate/SR) • E.g: • SR: $2 = BP1 • FR: $2.02 = BP1 • FP = [(2.02 – 2)/2) x 100 = pound pada premium ke hadapan 1% (atau 2sen) utk 3 bulan atau (1% x 4 =) 4% setahun Carbaugh, Chap. 12

17. Diskaun Ke Hadapan (FD) • Kadar Hadapan (Forward rate/FR) lebih rendah daripada kadar semesrta (Spot rate/SR) • E.g: • SR: $2 = BP1 • FR: $1.98 = BP1 • FP = [(1.98 – 2)/2) x 100 = pound diskaun ke hadapan 1% utk 3 bulan • Setahun -1% x 4 = -4% Carbaugh, Chap. 12

18. Foreign exchange markets Hedging (perlindungan nilai) • Kaedah untuk mengelakkan risiko k/pertukaran asing (bg pembayaran dan penerimaan masa hadapan). • Pembayaran masa hadapan perlu dilindungi jika wujud kemungkinan kadar semerta masa hadapan lebih tinggi (nilai matawang domestik susutnilai) • Kadar pertukaran asing meningkat – menguntungkan pengeksport dan merugikan pengimport • Kadar pertukaran asing jatuh – menguntungkan pengimport dan merugikan pengeksport Carbaugh, Chap. 12

19. 2 cara mengelakkan risiko • Mendeposit wang dalam bank • Beli atau jual pound dalam pasaran ke hadapan Carbaugh, Chap. 12

20. Foreign exchange markets Speculation • Speculation differs from arbitrage, in that it involves the purchase or sale of a currency in the expectation that its value will change in the future • Kegiatan membeli matawang dengan harapan nilainya akan naik pada masa hadapan atau menjual matawang dengan harapan nilainya akan turun pada masa hadapan • Spekulasi spot – spekulasi dilakukan di pasaran spot • Spekulasi pasaran ke hadapan – spekulasi dilakukan di pasaran ke hadapan Carbaugh, Chap. 12

21. Interest arbitrage • involves taking advantage of differences in international interest rates to get a higher return • Subject to exchange rate risk Carbaugh, Chap. 12