The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia
<p>Nearly all countries whose exports are highly concentrated in fuel products fix their nominal exchange rate in order to protect the livelihoods of vulnerable workers in other sectors from exchange rate changes that could be caused by variations in international fuel prices. In this paper, w...
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| Format: | Working paper |
| Language: | English |
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Oxford Institute for Energy Studies
2013
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| _version_ | 1797052850107318272 |
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| author | Mahadeva, L |
| author_facet | Mahadeva, L |
| author_sort | Mahadeva, L |
| collection | OXFORD |
| description | <p>Nearly all countries whose exports are highly concentrated in fuel products fix their nominal exchange rate in order to protect the livelihoods of vulnerable workers in other sectors from exchange rate changes that could be caused by variations in international fuel prices. In this paper, we assess the impact that fuel price-induced exchange rate variability has on the different sectors of fuel-exporting countries, taking Colombia as a case-study. We document the rich variety of sectoral responses to an oil-price induced appreciation in Colombia and assess different solutions to underperforming sectors.</p> <p>Our analysis points to policies that improve the options available to workers in exposed sectors. We also suggest that there may be an additional need for sectoral countercyclical macroprudential tools – those that can be used to reduce lending only to non-tradable sectors – in times of fuel price-induced exchange rate appreciation. Examples of these tools are higher loan-to-value ratios and risk weights on mortgages, on the commercial retail sector, and on personal loans, together with regulatory capital ratios, sectoral liquidity buffers, or taxes on housing sales.</p> |
| first_indexed | 2024-03-06T18:36:28Z |
| format | Working paper |
| id | oxford-uuid:0b6a43fe-5291-4947-90be-127b1a3a8e5d |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T18:36:28Z |
| publishDate | 2013 |
| publisher | Oxford Institute for Energy Studies |
| record_format | dspace |
| spelling | oxford-uuid:0b6a43fe-5291-4947-90be-127b1a3a8e5d2022-03-26T09:29:11ZThe Sectoral Effects of Exchange Rate Fluctuations – A Case Study of ColombiaWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:0b6a43fe-5291-4947-90be-127b1a3a8e5dEnglishOxford University Research Archive - ValetOxford Institute for Energy Studies2013Mahadeva, L<p>Nearly all countries whose exports are highly concentrated in fuel products fix their nominal exchange rate in order to protect the livelihoods of vulnerable workers in other sectors from exchange rate changes that could be caused by variations in international fuel prices. In this paper, we assess the impact that fuel price-induced exchange rate variability has on the different sectors of fuel-exporting countries, taking Colombia as a case-study. We document the rich variety of sectoral responses to an oil-price induced appreciation in Colombia and assess different solutions to underperforming sectors.</p> <p>Our analysis points to policies that improve the options available to workers in exposed sectors. We also suggest that there may be an additional need for sectoral countercyclical macroprudential tools – those that can be used to reduce lending only to non-tradable sectors – in times of fuel price-induced exchange rate appreciation. Examples of these tools are higher loan-to-value ratios and risk weights on mortgages, on the commercial retail sector, and on personal loans, together with regulatory capital ratios, sectoral liquidity buffers, or taxes on housing sales.</p> |
| spellingShingle | Mahadeva, L The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title | The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title_full | The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title_fullStr | The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title_full_unstemmed | The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title_short | The Sectoral Effects of Exchange Rate Fluctuations – A Case Study of Colombia |
| title_sort | sectoral effects of exchange rate fluctuations a case study of colombia |
| work_keys_str_mv | AT mahadeval thesectoraleffectsofexchangeratefluctuationsacasestudyofcolombia AT mahadeval sectoraleffectsofexchangeratefluctuationsacasestudyofcolombia |