IDEAS home Printed from https://ideas.repec.org/a/aat/journl/360.html
   My bibliography  Save this article

Exchange Market Pressure Index As A Macroeconomic Risk Measuring Instrument

Author

Listed:
  • Tatiana COLESNICOVA

    (INCE)

  • Rodica PERCIUN

    (INCE)

  • Alexandra TVIRCUN

    (INCE)

Abstract

The financial sector of the Republic of Moldova belongs to the developing ones and is characterized by a higher level of risk and, therefore, a higher likelihood of a systemic crisis. Globalization and development of advanced information technologies not only create great opportunities for rapid economic development, but also pose serious security threats to the economic development of states, especially in a developing economy. In these conditions, the issue of ensuring the financial stability of the state is becoming increasingly relevant. The state of the financial and foreign exchange market represents one of the most important aspects of the financial security of the state. This study has been developed as part of the scientific project 15.817.06.02A "Development of tools for measuring the financial stability of the state". The study analyzes various macrofinancial risk management tools. The purpose of this study was to calculate the pressure index on the foreign exchange market of both the Republic of Moldova and the main partner countries in terms of international trade. The results of related studies conducted by the authors of this work, which revealed that stability indicators in the foreign exchange market are associated with foreign trade risks served as an argument for the authors of the work to calculate the pressure index on the currency market of Romania and the Russian Federation for comparison with the indicators of the Republic of Moldova. Methods used in research include theoretical and comparative approaches, descriptive statistics and econometric models. The results of the research showed that international trade and the foreign exchange market are interdependent. The first can be considered a channel for transmitting the currency crisis, since demand increases with increasing imports, and this leads to increased pressure on the foreign exchange market. Increased exports reduce pressure on the foreign exchange market. But the greatest impact on the foreign exchange market in the Republic of Moldova is made by remittances from abroad, which are directly correlated with the dynamics of labor exports. At the same time, it was concluded that at present, due to macroprudential regulation, there are no linear dependencies in financial markets and, therefore, there are no correlations, but only the interdependence of variables.

Suggested Citation

  • Tatiana COLESNICOVA & Rodica PERCIUN & Alexandra TVIRCUN, 2020. "Exchange Market Pressure Index As A Macroeconomic Risk Measuring Instrument," Economy and Sociology, The Journal Economy and Sociology, issue 1, pages 10-20.
  • Handle: RePEc:aat:journl:360
    Note: https://doi.org/10.36004/nier.es.2020.1-01
    as

    Download full text from publisher

    File URL: https://economy-sociology.ince.md/?edmc=3169
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    macroeconomic risk; financial instability; currency crisis; pressure index on the foreign exchange market; countercyclical macroeconomic policies; macroprudential regulation.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • G01 - Financial Economics - - General - - - Financial Crises

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aat:journl:360. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iordachi Victoria (email available below). General contact details of provider: https://edirc.repec.org/data/iefscmd.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.