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Exchange Rates and Trade Mr. Heiner Flassbeck Director, Division on Globalization and Development Strategies, UNCTAD Geneva, 28th March 2012.

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Presentation on theme: "Exchange Rates and Trade Mr. Heiner Flassbeck Director, Division on Globalization and Development Strategies, UNCTAD Geneva, 28th March 2012."— Presentation transcript:

1 Exchange Rates and Trade Mr. Heiner Flassbeck Director, Division on Globalization and Development Strategies, UNCTAD Geneva, 28th March 2012

2 2 Exchange rates have become disconnected from macroeconomic fundamentals Real effective exchange rate, selected countries, 2000–2011 (Index numbers, 2005 = 100, CPI based), source: IMF

3 Exchange rates have become disconnected from macroeconomic fundamentals Real effective exchange rate, selected countries, 2001–2010 (Index numbers, 2005 = 100, ULC based), source: UNCTAD Secretariat calculation based on Economist Intelligence Unit and OECD for ULC data

4 Carry trade vis-à-vis Japanese Yen, (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note:A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

5 Carry trade vis-à-vis Japanese Yen, (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note: A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

6 Carry trade vis-à-vis Japanese Yen, (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note:A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

7 International reserves and net portfolio investment, Source: Unctad Secretariat calculations, based on IMF, International Financial Statistics database. Note: Total reserves correspond to total reserves minus Gold and an increase in reserves corresponds capital outflows. Quarterly data.

8 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Brazil, (2000 = 100), source: UNCTAD Secretariat

9 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Argentina, (2005 = 100), source: UNCTAD Secretariat

10 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, China, (2000 = 100), source: UNCTAD Secretariat

11 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Republic of Korea, (2000 = 100), source: UNCTAD Secretariat

12 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Thailand, (2000 = 100), source: UNCTAD Secretariat

13 Exchange Rates and Trade Thank you

14 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Malaysia, (2000 = 100), source: UNCTAD Secretariat

15 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Iceland, (2000 = 100), source: UNCTAD Secretariat

16 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Sweden, (2000 = 100), source: UNCTAD Secretariat

17 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Italy, (2005 = 100), source: UNCTAD Secretariat

18 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Hungary, (2000 = 100), source: UNCTAD Secretariat

19 General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, South Africa, (2000 = 100), source: UNCTAD Secretariat

20 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Germany, (2000 = 100), source: UNCTAD Secretariat

21 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, United Kingdom, (2000 = 100), source: UNCTAD Secretariat

22 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Switzerland, (2000 = 100), source: UNCTAD Secretariat

23 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Canada, (2005 = 100), source: UNCTAD Secretariat

24 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, United States, (2000 = 100), source: UNCTAD Secretariat

25 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Japan, (2000 = 100), source: UNCTAD Secretariat

26 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Australia, (2005 = 100), source: UNCTAD Secretariat

27 General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, New Zealand, (2005 = 100), source: UNCTAD Secretariat


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