2011 Examination Question (7)
(a) Are there conflicts in foreign exchange
transactions between market practices and
the Shari’ah principles?
(b) Are there viable Islamic alternatives to
currency forwards?
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2011 Exam Q&A (7a)
• Islamic stance on Riba, Gharar, Maysir and short selling.
(a) currency exchange **
(Yes)
(b) currency arbitrage **
(Yes)
(c) interest arbitrage **
(No)
(d) currency forwards**
(IFI)
(e) currency options**
(IFI)
(f) currency futures**
(IFI)
(g) currency swaps**
(Conditional)
(g) risk-shifting (invoicing)** (Conditional)
(h) risk-sharing**
(Yes)
(i) exposure netting**
(Yes)
2
2011 Exam Q&A (7b)
• Many IFIs do use currency forwards and futures for hedging
purposes as required by regulators (despite Islamic prohibition)
• As risk management is an Islamic virtue, it is argued that the use of
these contracts for hedging purposes makes sense. Argument:
hedging is not an income earning activity, but Riba is. No Riba
involved in hedging per se. Besides, hedging reduces Gharar
(uncertainty).
• Forwards and futures transacted based on Islamic nominate
contracts such as Salam, Sarf a Wa’ad, Istisna to buy or sell at a
future date.
• Islamic FX swap: Tawarruq contract and Wa’ad principle: each
contract must be actual, fictitious; each contract gives ownership;
each contract is separate and independent, not conditional to one
another
3
2011 Exam Q&A (7a) con’d
• The Wa’ad principle: The unilateral agreement involves two parties, where
first party promises to buy or sell currency for settlement on a forward
value date at the rate and agreed today. The party that makes the promise
is obliged to honor the agreement whereas the other party is not obliged
to do the same. MYR for USD, JPY, GBP etc are available for contract of <12
months.
• Deutch Bank’s “Promissory Currency Sale Undertaking” based on a
unilateral promise the bank to sell a currency at a predetermined price
and agreed upon future date (Wa’ad-based product).
• Wa’ad and Commodity Murabaha (CM) based product: “Dual Currency
Structured Investment”. Two components: Murabaha, based on a
commodity and “unilateral promise to exchange currencies”. Investment
enables one to earn a return from CM while receiving a unilateral promise
from HSBC to exchange pre-determined amt of FX within given time
frame, locking-in a FX rate.
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2011 Examination Question (8)
• Examine the implications of the on-going
quantitative easing in the US and fiscal
tightening in the euro zone for USD and EUR
currencies.
(10 marks)
5
2011 Exam Q&A (8)
• Background: The 2008 global financial crisis and the US and Euro
Zone responses had led to colossal fiscal stimulus packages.
• Bailouts by governments had converted private debts into public
debts.
• Ballooning sovereign debt is a serious problem in the US and EU (US
due to wars; EU due to unsustainable welfare states)
• The US, more concerned about unemployment than inflation, keeps
interest rate close to zero, pumping in liquidity.
• Europe, less tolerant toward inflation, more concerned about
sovereign debt problem and fearful of the contagion from PIIGS is
stressing the importance of fiscal discipline and austerity programs.
• The US, one of the most debt-laden nation has lost its AAA rating.
• Quantitative easing to stimulate the US economy will lead to higher
inflation which will cause USD to depreciate. Much would, however,
depend on whether BOP surplus countries like China would let this.
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2011 Exam Q&A (8) cont’d
• Fiscal austerity in the euro zone would sedate EZ
economies into near-zero growth.
• Imports into US and EZ will decline, partly due to slower
economic growth and partly due to the weakening of their
currencies.
• Prognosis for EUR: will Greece quit EZ? More to follow? If
they don’t will Germany exit? No clear yes or no answers.
• PIIGS need growth badly but austerity would work in the
opposite direction.
• With weak economic growth and/or inflation, USD and EUR
are likely to depreciate, which is not a good news for Asia,
as their currencies will appreciate making their exports
uncompetitive.
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INTERNATIONAL
FINANCE REVISITED
LECTURE 14
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[1.1] Balance of Payments
• Statistical record of international transactions for a given
period – based on double-entry book-keeping.
• Split into Current Account and Capital Account: Surplus in
one country is offset by Deficit in some others.
• Visible Trade Balance = Xg - Mg
• Balance of Trade = X - M (inc services; exc uni transfers).
• Basic Balance = Current Acc Balance + Net FDI flows
• Overall Balance (Official Settlement Balance) = Basic
Balance + short-term capital flows: if >0, it will add to CB
reserves; if negative, it will reduce reserves.
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[1.2]Current vs Capital Account
• Current Account shows how foreign exchange is earned
and spent.
• Capital Account shows how the surplus is used or the
deficit is financed.
• Strength of the currency will depend, among others, on
the strength of BOP: currency to depreciates, if deficit
persists; currency to appreciate, if surplus continues.
• Wrong to view BOP deficit as bad and BOP surplus as
good: both represent imbalance; deficit may be a sign of
boom; surplus may be a sign of deceleration/stagnation.
• One country’s surplus is another’s deficit (zero-sum).
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[1.3] When BOP Becomes An Issue
BOP becomes an issue if:
• the deficit is large relative to GNP or GDP
• there is international pressure (in the face of growing
BOP surplus and reserves: Japan before, China now)
• the imbalance is persistent
• the deficit is financed by rundown of reserves (esp.
where reserves are at low levels)
• deficit is financed largely by short-term capital flows
• external debt is large
• the currency is overvalued
• the economy is overheating
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[1.4] When BOP Is Not An Issue
BOP is not an issue when:
• deficit/surplus is small relative to GNP or GDP
• Imbalance is perceived to be temporary
• deficit is financed by long-term (FDI) capital
inflows
• external debt is small
• reserves are at comfortable levels (capacity to
import and to service external debt).
• currency is not overvalued
• economy is not overheating
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[1.5] BOP & Exchange Rate
• Generally, BOP influences currency values in the
FX market: positive influence during surplus and
negative influence during deficit.
• However, it is not unusual for deficit-country
currency to strengthen, if the economy is
booming and deficit is financed by large FDI
inflows and the currency is perceived to be
undervalued.
• XR may appreciate temporarily, if country
borrows! (MYR appreciation in early 80s)
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[2.1] International Monetary Theory
• BOP can adjust itself automatically, thanks to built-in
mechanism.
• In the Classical Model, the adjustment takes place
through gold movements and price changes (relative
prices of X and M).
• In the Keynesian Model, the adjustment is via changes
in output and employment (DD for M and SS of X).
• In the Absorption Model, through changes in CB
reserves and C+I.
• In a flexible XR system, through XR appreciation or
depreciation.
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[2.2] BOP Corrections
• Main problem with automatic mechanisms is that
they tend to be either slow or incomplete and in
conflict with other domestic policy objectives.
• Hence the call for policy measures to reduce, if
not eliminate, BOP deficit ( e.g. currency
devaluation, IR increase, fiscal austerity)
• Devaluation would work only if demand for X and
M are price-elastic (Marshall-Learner condition
that sum of the X and M demand elasticity must
exceed unity)
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[2.3] How Devaluation Works
• Devaluation affects demand for X and M not only
through price changes but also through changes
in income (Y) and absorption (C+I), where
dB=dY-dA
• In the Absorption Approach, the impact on BOP
will depend on dY and dA. BOP will improve
(dB>0), if dY>dA, and worsen (dB<0) if dY<dA,
where dY and dA are positive
• Where dY and dA are negative, BOP will improve
(dB>0), if dY<dA, and worsen (dB<0) if dY>dA
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[2.4] Devaluation: Reservations
• Since the impact on BOP (dB) depends on the elasticity of
demand for X and M (diagrams help) and on income (Y)
and absorption (A=C+I), where A would depend largely
on the marginal propensity to absorb (refer to equations
and diagrams), the outcome is uncertain and therefore
there is a tendency to devalue excessively to ensure
stronger impact.
• Competitiveness gained by devaluation may be lost by
rising costs at home or competitive devaluation by rivals
abroad.
• For competitiveness, it is RER, not NER that matters.
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[3.1] Exchange Rate Determination
• FX market is almost perfect, as it has nearly all
the attributes of a perfect market.
• Exchange rate (XR) is determined by SS & DD for
the currencies.
• Macroeconomic factors (e.g. IR) influence XR.
• Exports add to SS of FC (= DD for LC)
• Imports add to SS of LC (= DD for FC)
• CB intervention in FX market is not uncommon.
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[3.2] Interventions in FX Market
• CB interventions in FX mkt. can cause domestic problems
(e.g. inflation, unemployment).
• CB can neutralize such impacts through sterilization
(Open Market Operations, mopping up excess liquidity or
adding liquidity).
• FX mkt. interventions tend to be ineffectual if not
irresponsible: treating symptoms, not the disease.
• CBs intervenes in the spot mkt. to iron out short-term
fluctuations without tempering with long-term trends.
• CB intervention in the forward mkt. can assist in
managing spot rates but there are greater risks.
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[3.3] Forward Market Interventions
• Main argument against forward intervention: more
dollars will be sold in the process, to shore up LC,
than will be the case otherwise, resulting in bigger
losses, should CB fail and LC is devalued.
• Counterargument: Yes, more dollars will be sold, but
the extent of devaluation and the probability would
be smaller with forward intervention, in which case
losses may well be smaller with intervention than
without.
• No easy answers!
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[4.1] Foreign Exchange Market
•
•
•
•
•
•
Spot market represents 33% of the FX market.
Forward market constitutes 12%.
Swap transactions form 55%.
Interbank market serves as the wholesale market.
Ask price > bid price: % spread = (a-b)/a x100.
Currency arbitrage takes advantage of ‘mispricing’ of currencies in
different markets, resulting price equalization.
• Traders buy and sell FX in the spot market and take “cover” in the
forward market; arbitrageurs take advantage of differences in XRs
and IRs; hedgers make forward contracts for protection;
speculators just gamble on XR movements in both markets.
• Roles played by traders, arbitrageurs, hedgers and speculators in
the FX market are different, but their outcomes are similar in the
sense that they move XRs towards equilibrium and parity.
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[4.2] Forward Market
• Forward Contracts protect against XR risk
• Traders “cover” exposures arising from X & M
transactions
• Investors “hedge” to protect their foreign
assets/liabilities from XR risk
• Forward discount = (Xt -Xo)/Xo, where Xt < Xo
• Forward premium = (Xt–Xo)/Xo, where Xt > Xo
• Forward Contracts, unlike Currency Options, are
legally binding commitments for both sellers and
buyers
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[5.1] Parity Conditions
• PPP is about theoretical relationship between relative price levels
and spot exchange rates (inflation differential equals % change in XR
at parity) - Diagram helps!
• Fisher Effect (FE) points to the connection between IR differential
and inflation differential (inflation differential equals IR differential
in % terms at parity) – Diagram helps!
• Intl. Fisher Effect combines PPP and FE so as to link IR differential to
XR change (IR differential equals expected change in XR) – Diagram!
• IR Parity (IRP) relates to relationship between IR differential and the
forward spread (forward premium/discount).
• Unbiased Forward Rate (UFR) connects expected future spot rate to
current forward rate (forward rates serve as unbiased
predictors/estimators of future spot rates).
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[5.2] Parity Implications
• According to PPP, XR between HC and FC will adjust to reflect
changes in price levels of the two countries (thus, a 3% higher
domestic inflation is offset by 3% appreciation of FC or 3%
depreciation of HC) so that real exchange rate remains unchanged
although nominal XR has changed.
• According to Fisher Effect, the nominal IR differential will roughly
equal the inflation differential, so that currencies with high rates of
inflation should bear correspondingly higher IRs than currencies
with lower rates of inflation (3% higher inflation warrants 3% higher
IR).
• Int’l Fisher Effect: a currency with lower IR should appreciate
relative to currency with higher IR.
• IR Parity Theory: currency of the country with a lower IR should
enjoy a forward premium vis-à-vis currency of the country with
higher IR (higher IR implies forward discount for the currency)
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[5.3] Capital Flows
• Funds flow from one country to another to take advantage of
higher returns abroad (from low-IR country to high-IR country, after
adjusting for FX risk through forward contracts (so long as IR
differential > forward discount).
• Funds also flow from high-IR country to low-IR country, if forward
premium > IR differential.
• Funds will stop moving between countries until forward spread
(premium/discount) equals the IR differential.
• Capital movement will cause IR to fall in capital-importing country
and rise in capital-exporting country (reducing IR differential) and
raise the spot rate of the former’s currency and lower its forward
rate (widening the forward spread) until IR differential equals the
forward spread – in which case there is no incentive to move funds
between the 2 countries.
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[6.1] Currency Futures Market
• Currency Futures and Currency Options provide (a) protection
against FX risk for traders and investors and (b) opportunities for
arbitrageurs and speculators.
• Combination of low cost and high degree of leverage make futures
contracts attractive for the participants.
• Futures contracts differ from forward contracts in many ways. Main
advantage: small size of the contract and freedom to liquidate at
any time before maturity with low default risk. Main disadvantage:
limited number of currencies traded, limited delivery dates and
rigid contractual amount to be delivered.
• Futures contracts are of value to customers with stable and
continuous stream of payments/receipts in foreign currency.
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[6.2] Currency Futures/Forwards
• Currency futures are poor substitutes for currency forwards
(for hedging purposes) but can be good supplements.
• “Forwards-Futures Arbitrage” applications bid up the futures
price and bid down the forwards price, where the forward
price > the futures price ( the other way around where the
forward price < the futures price) until approximate equality is
established.
• Empirical evidence: forward and futures prices converge and
do not differ significantly (they often influence each other,
especially through arbitrage applications)
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[6.3] Currency Options
• Currency Options comprise (a) Call Options and (b) Put
Options, where “the holder” is the customer and “the writer”
is the dealer or the agent.
• Call Options give the customer the rights “to buy” (with no
obligations to buy) contracted currencies at the expiration
date.
• Put Options give the customer the rights “to sell” (with no
obligations to sell) the contracted currencies at the expiration
date.
* Note: American option can be exercised at any time up to the
expiration date, whereas the European option can be
exercised only at maturity.
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[6.4] Currency Options Implications
• The “holder” has the rights to buy (Call Option)or sell (Put Option)
but is not obliged to buy or sell, while the “writer” is obliged to sell
or buy as stipulated in the contract, should the holder demand so.
• If the strike price < spot rate, the holder of a Call Option is at an
advantage (buying at a discount); if the strike price > spot rate, the
holder of a Put Option will benefit (selling at a premium) – both
instances are described as “in-the-money” situation (the holder will
exercise the rights).
• Where the strike price > spot rate, the holder of a Call Option is at a
disadvantage (buying at a premium); where the strike price < spot
rate, the holder of a Put Option stands to lose (selling at a discount)
– both represent “out of the money” situation (the holder will not
to exercise the rights).
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[7.1] Accounting Exposure
• Accounting exposure consists of (1)
translation exposure and (2) transaction
exposure (more of the former).
• Translation exposure impacts on balance
sheet assets & liabilities and existing income
statement items.
• Transaction exposure impacts on FC
denominated contracts already signed but to
be settled at a future date.
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[7.2] Exposure Risk
•Translation exposure is simply the difference between FC
exposed assets and FC exposed liabilities (no translation
exposure, if FC exposed assets = FC exposed liabilities).
• Where exposed assets > exposed liabilities, the risk is linked to
depreciation of FC; conversely where exposed assets < exposed
liabilities, the risk is linked to appreciation of FC.
•Depreciation of FC is good for FC denominated liabilities but bad
for FC denominated assets. Appreciation of FC is good for FC
denominated assets but bad for FC denominated liabilities.
•Accounting exposure can be measured and managed by using
historical XR or current XR or average XR so as to minimize effects
of XR movements on dollar returns.
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[8.1] Economic Exposure
• Economic exposure comprises (1) transaction
exposure and (2) operating exposure.
• Transaction exposure impacts on FC
denominated contracts already signed but yet
to be settled.
• Operating exposure impacts on revenues and
costs associated with future sales and future
cash flows.
32
[8.2] Measuring Economic Exposure
• It is real XR not nominal XR that holds the key
to measuring economic exposure.
• Changes in real XR affect firm’s
competitiveness.
• Impact depends on many variables such as:
location of the firm’s markets and its
competitors, SS/DD elasticity, substitutability
of inputs (local vs. foreign) and offsetting
inflation.
33
[8.3] Managing Economic Exposure
• Transaction and operating exposures call for hedging
applications: e.g. currency forwards, currency options,
currency futures, currency collars, money market
hedge, currency risk sharing arrangements, exposure
netting, etc.
• The key to effective exposure management is to
integrate currency considerations into the general
management process.
• Integrated XR risk program: (a) provide forecasts of
inflation and XR trends, (b) identify and highlight the
risk of competitive exposure, (c) estimate and hedge
the remaining exposure (mentioned above).
34
[9] Country Risk Analysis
• Main concern centers on FX risks associated with LC
which may wipe out profits in HC terms.
• Monitoring changes in the investment environment
that may impinge on MNC profits
• Focus on institutional factors (lean government, rule of
law, independent judiciary, property rights)
• Foreign banks providing external loans face country
risk in addition to commercial risk
• Credit risk depends on the variability of the country’s
Terms of Trade and social flexibility in difficult times.
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[10.1] Cost of Capital in Foreign
Investment
FACTORS DETERMINING DEBT-EQUITY MIX:
• Cost of equity for the parent company
• Cost of debt for the parent (after tax)
• Parent’s debt-equity ratio
• Cost of foreign debt (taking into account inflation rate, IR and
XR changes)
• Taxes in the country of foreign subsidiary (corporate and
withholding taxes)
• Systematic risk and risk premium
• Extent of unsystematic risks that can be diversified away
36
[10.2] Risks Affecting Cost of Capital
• Systematic risks are non-diversifiable and therefore warrant risk
premium, while unsystematic risks can be eliminated by
diversification
• Rate of return on risk-free asset (e.g. UST) is low
• Market risk premium = rate of return on market portfolio minus
rate of return on risk-free assets
• LDCs offer more diversification benefits than DCs for foreign
investment
• LDCs’ ratio of systematic to total risk is relatively low
• Corporate int’l diversification is beneficial to shareholders
• Shareholders accept lower rate of return on MNC shares than on
shares of uninational firms
• Cost of equity capital (Ke) > cost of borrowed capital (Kd)
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[10.3] Calculating the Discounting
Factor in Foreign Investment
Three categories of fund sources :
* Funds from Parent
* Internal funds of the foreign Subsidiary
* Debt raised in the foreign country of investment
1. Cost of funds from Parent (Kep): Parent’s cost of equity at home (Ke)
adjusted for increased risk abroad, and taking into account
Parent’s debt-equity ratio and cost of debt (Kd)
2. Cost of internal funds of Subs (Ks): Kep, with allowances for
withholding tax
3. Cost of new foreign debt (Kndf): IR with adjustments for expected
devaluation (i.e. inflation) and corporate tax
All 3 components will then be weighted (weights based on respective
fund size) to arrive at the discounting factor
38
[11.1] The Euro Market
• Eurocurrency and Eurobond markets are a response to restrictions,
regulations and costs that govts. impose on domestic financial
transactions
• Eurocurrency operates like offshore currencies, not subject to
regulations of the country of currency or the country where it
operates (e.g. eurodollar, euroyen, europound, euroeuro)
• Eurocurrency loans: Loans denominated in Eurocurrency (no
selling or buying of Eurocurrency, just borrowing and lending)
• Eurobanks receive Eurocurrency deposits and make Eurocurrency
loans (offer higher deposit rates to attract funds and lower lending
rates – thin margin but in large amounts, truly a wholesale market)
• Euromarket has nothing to do with the currency Euro or the
continent Europe (Thus, Eurodollar market can exist anywhere
outside US, just as Euroyen market can exist outside Japan, or
Euroeuro market outside Euro Zone)
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[11.2] Eurobonds/Euronotes
• Eurobonds compete with Eurocurrency loans
• Euronotes are short-term papers (underwritten euro
commercial papers) issued by borrowers
• Euro-CPs are non-underwritten short-term Euronotes
• Most MNCs raise funds through Eurocurrency loans,
Eurobonds, and Euronotes, because it is cheaper (thanks to
absence of regulations and restrictions, and the wholesale
nature)
• Asiacurrency and Asiabond markets are technically or
generically no different from Eurocurrency and Eurobond,
respectively, and therefore no more than a copy/imitation
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[11.3] Interest Rate Swaps (IRS)
• Swap arrangements represent financial transactions
in which 2 counterparties agree to exchange streams
of payments over time so as to lower their cost of
funds.
• In IRS, what is exchanged is interest payments but
not the principal.
• “Coupon Swaps” refer to swaps from fixed to floating
rate.
• “Basis Swaps” refer to swaps from one reference
floating rate to another reference floating rate.
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[11.4] Currency Swaps
• Currency Swap refers to transaction in which 2 parties exchange
specific amounts of 2 currencies at the outset and repay over time
interest payments and amortization of principal.
• In a Currency Swap, notional principal is exchanged at the start and
reversed at the end of the contract.
• Currency Swaps can help manage XR risk.
• In the process, one party shoulders the other party’s higher interest
rate (which reflects higher inflation rate and forward discount on
the currency).
• Currency Swap behaves like a long-dated forward FX contract, in
which the forward rate is the current spot rate. Interest
differential is the implicit forward premium/discount.
42
[12.1] International Monetary System:
Evolution
• Classical Gold Std (1821-1914); Gold Exchange Std (1925-1931);
Bretton Woods System(1946-1971); Current Hybrid System (1971
onward).
• Classical Gold Std: currency was backed fully by gold; XR was
determined by gold content (Mint Par); BOP adjustments through
gold and price movements.
• Gold Exchange Std: US & England holding gold reserves, while
others holding US dollars and British pounds as reserves in addition
to some gold.
• Bretton Woods System: gold price fixed at US$35 an ounce; Pegged
XRs with little flexibility (1%); Govts. were obliged to intervene to
keep XR within the narrow band with IMF help if necessary.
Devaluation was permitted only at rare intervals , in case of
“fundamental disequilibrium”.
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[12.2] Post-Bretten Woods
• US, bleeding from Vietnam War and domestic inflation, could not
honor its promise to redeem $ for gold @ $35 per ounce: the
system broke down in 1971.
• Hybrid System consists of 4 broad categories: Free Float, Managed
Float, Target Zone Arrangement, and Pegged XRs.
• Experience shows XR can’t be fixed for long; XR is often used as
policy tool to achieve domestic policy objectives (no genuine desire
for equilibrium XR).
• Returning to gold is not a viable proposition: not enough gold to go
around; won’t work unless gold price is fixed (a wishful thinking).
• Going back to fixed XRs will make sense, only if all else can adjust
to XRs – politically unpalatable.
44
[12.3] The Way Forward
• Some XR flexibility will do good for BOP adjustments and
domestic policy independence.
• Floating rates are not inherently unstable, if underlying
economic conditions are fairly stable.
• For XR to be stable, inflation rate and interest rate must also
be stable.
• Maintaining unrealistic XR is an uphill task and there is no
escape from market forces.
• Regional arrangements such as OCA and CCA are fraught with
difficulties, if the European experience is any indicator.
• Impossible to craft a new international financial architecture
that would suit all countries under existing fluid conditions.
45
[13.1]Islamic Issues in International
Finance
• Islamic Finance is still at an embryonic stage, with some controversy
over the permissibility and applicability of several Islamic financial
instruments (e.g. Tawarruq Financing, Sukuk).
• Rules that govern Islamic banking and finance also apply equally to
international finance in the Islamic paradigm.
• Most conventional instruments currently used against FX risks fail to
meet the basic Islamic criteria relating to interest rate, ambiguity,
speculation and murky link to real sector activities (esp. currency
forwards, currency futures, currency options, currency swaps,
money market hedging).
• Hedging techniques that seem to comply with Shari’ah
requirements include: CRSA, Exposure Netting and Pricing Strategy.
46
[13.2] Islamic Perspective
• Need to devise Shair’ah compliant instruments for managing FX
risks – but these must be cost-effective.
• Many IFIs do use currency forwards and futures for hedging, based
on the logic that these are required by regulators and
rationalisation that hedging unlike Riba is not an income earning
activity, while it reduces Gharar (uncertainty).
• Islamic FX Swap (Tawarruq & Wa’ad); Promissory Currency Sale
Undertaking (Deutsche Bank); Dual Currency Structured Investment
(HSBC Amanah); FX Option-I, FX Calendar Plus-I, TARF-I, Zero Cost
Collar-i
• Liberal interpretations in grey areas can be a stop-gap measure but
cannot be a long-term solution.
• Some hedging activities that are non-Shari’ah compliant under
certain conditions may be treated as “necessary evil”.
• Are these permissible if they do more good than harm?
47
Presented Articles
• Takatoshi Ito (2007), “Asian Currency Crisis and the
International Monetary Fund, 10 Years Later: Overview”
Asian Economic Policy Review, Vol. 2, No.1
• Stephen Grenville (2007), “Regional and Global Responses
to the Asian Crisis”, Asian Economic Policy Review, Vol. 2,
No. 1
• Mitsuhiro Fukao (2008), “Financial Crisis and the Lost
Decade”, Asian Economic Policy Review, Vol. 2, No. 2
• Morris Goldstein and Daniel Danxia Xie (2009), “US Credit
Crisis and Spillovers to Asia”, Asian Economic Policy Review,
Vol. 4, No. 2
• Takatoshi Ito (2010), “China as Number One: How About
the Renminbe?”, Asian Economic Policy Review, Vol. 5, No.2
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END OF LECTURE 14
ALL THE BEST! FLYING COLOURS!!
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