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Europe > Norway

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Foreign exchange market x
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Cover IMF Working Papers
Currencies of External Balance Sheets
Mr. Cian Allen
,
Deepali Gautam
, and
Luciana Juvenal
This paper assembles a comprehensive dataset of the currency composition of countries’ external balance sheets for 50 economies over the period 1990–2020. We document the following findings: (i) the US dollar and the euro still dominate global external balance sheets; (ii) there were striking changes in the currency composition across countries since the 1990s, with many emerging markets having moved from short to long positions in foreign currency, thus moving away from the so-called “original sin”; (iii) financial and tradeweighted exchange rates are weakly correlated, suggesting the commonly used trade indices do not adequately reflect the wealth effects of currency movements, and (iv) the large wealth transfers across countries during COVID-19 and the global financial crises increased global imbalances in the former, and reduced them in the latter.
Keywords:
currency composition; international investment position; foreign currency exposure; wealth effect; currency movement; currency exposure; debt liability; currency mismatch risk; pound sterling; Currencies; Exchange rates; Global financial crisis of 2008-2009; Financial statements; Global
Cover IMF Working Papers
Exchange Market Pressures and Speculative Capital Flows in Selected European Countries
Ceyla Pazarbasioglu
and
Ms. Inci Ötker
This paper estimates a speculative attack model of currency crises in an attempt to identify the roles of macroeconomic fundamentals and speculative market pressures in the recent crisis, as well as earlier devaluations in adjustable fixed exchange rate systems in the European currency markets. For a sample of five countries, including Denmark, Ireland, Spain, Norway, and Sweden, our empirical analyses show that both economic fundamentals and speculative factors have a significant influence on the probability of devaluations. The recent experience in the European foreign exchange markets suggests that the latest realignments are mainly the result of foreign exchange market tensions amidst the growing conflict between the needs of the domestic economies and the policies needed to maintain fixed exchange rates. Our results confirm that regardless of the source of the deterioration in economic conditions, market participants perceived the existing parities of the currencies in these five countries as inconsistent with their underlying economic fundamentals, thus effectively bringing about either a realignment or a modification of the exchange arrangement.
Keywords:
WP; central bank; interest rate; Swedish krona; devaluation probability; crisis model; price level; Norwegian krone; Italian lira; deutsche mark; adjustable peg; currency float; ERM currency; basket index; shadow exchange rate; Currencies; Currency markets; Exchange rate arrangements; Exchange rates; Conventional peg; Europe