International Currency Exposure
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From CESifo Seminar Series

International Currency Exposure

Edited by Yin-Wong Cheung and Frank Westermann

Issues in debates about foreign currency exposure—the denomination of liabilities or assets in foreign currency.

Overview

Author(s)

Summary

Issues in debates about foreign currency exposure—the denomination of liabilities or assets in foreign currency.

The foreign currency denomination of contracts in international transactions can lead to international currency exposure at the country level with important economic and policy implications. When debts are denominated in foreign currency and revenues in domestic currency, exchange rate fluctuations can result in balance sheet effects for countries with either net asset or liability positions. Moreover, currency mismatch between assets and liabilities can be a cause for crises in developing and emerging economies. This book looks at the issues surrounding foreign currency exposure in today's increasingly integrated world economy.

The contributors draw on cross-country as well as country-specific data. They consider international currency risk after the Swiss franc ended its one-sided peg with the euro, for example, and the foreign exchange positions of firms in Turkey and Russia. Other contributors take macroeconomic perspectives, examining the potential effects of exchange rate realignment, the pressure to appreciate on countries with current account surpluses, and the currency exposure in international trade. Finally, contributors consider the issue from finance and political economy perspectives, addressing the phenomenon of the forward premium puzzle and discussing geopolitical aspects ascending currencies.

Contributors Fatih Altunok, Huseyin Aytug, Agustín S. Bénétrix, Jörg Breitung, Paul De Grauwe, Eiji Fujii, Peter Garber, Juann H. Hung, Signe Krogstrup, Philip R. Lane, Katja Mann, Arif Oduncu, Gunther Schnabl, Maria V. Sokolova, Cédric Tille

Hardcover

$37.00 X ISBN: 9780262036405 328 pp. | 9 in x 6 in 54 figures

Editors

Yin-Wong Cheung

Yin-Wong Cheung is Hung Hing Ying Chair Professor of International Economics and Director of the Global Research Unit at City University of Hong Kong.

Frank Westermann

Frank Westermann is Professor of Economics and Director of the Institute of Empirical Economic Research at Osnabrueck University, Germany.