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Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
Chan chee m ang tp021569
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Chan chee m ang tp021569

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In the modernisation era, it is all about Globalisation in the international business context. With the rise in Globalisation resulted the increase level of international business activities and yet …

In the modernisation era, it is all about Globalisation in the international business context. With the rise in Globalisation resulted the increase level of international business activities and yet led to the rise of exchange rate events. Exchange rate is the price of a country’s currency expressed in another country’s currency or the rate at which one currency can be exchanged for another and this has to be taking into consideration by Multinational Corporations like Blades Inc. as the Thai based entertainment retailer In another word, appreciation of exchange rate for one Dollar in terms of one Baht (fixed rate) would result in depreciation of the value of Baht. The changes in exchange rates are determined by the factors of changes in interest rates, inflation, trade balance, political stability, internal harmony, high degree of transparency in the conduct of leaders and administrators, general state of economy, and quality of governance. The exchange rate is considered as the vital factor of any country’s economy and indication of the financial health.

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  • 1. Chan Chee Mang TP021569 BM024-3-3-ICFIN BM024-3-3 INTERNATIONAL CORPORATE FINANCE Student Name Chan Chee Mang Student ID TP021569 Intake Code & Course UC3F1201 IBM Assignment Code & Description BM024-3-3-ICFIN International Corporate Finance Assignment Title Exchange Rate Determination Hand in date 15th October 2012 Lecturer name Edward Thangaratnam PaulAsia Pacific University of Technology & Innovation Page | 1
  • 2. Chan Chee Mang TP021569 BM024-3-3-ICFINTable of Contents1.0 Introduction ................................................................................................................................. 32.0 Currency Value’s Percentage Change Measuring Methods in Thai Baht. .................................. 33.0 Basic Factors That Determine the Value of Currency and Its Relationships. ............................. 54.0 Level of Inflation and Interest Rates affect the Baht Value in Thailand..................................... 85.0 Losing confidence in Thai Baht and the effects ........................................................................ 116.0 Interest rate prevent further changes in the currency’s value.................................................... 127.0 Conclusion ................................................................................................................................ 138.0 References ................................................................................................................................. 14 8.1 Offline Resources........................................................................................................................ 14 8.2 Online Resources ........................................................................................................................ 159.0 Appendixes (refer to the CD) .......................................................................................................... 17Asia Pacific University of Technology & Innovation Page | 2
  • 3. Chan Chee Mang TP021569 BM024-3-3-ICFIN1.0 IntroductionIn the modernisation era, it is all about Globalisation in the international business context.With the rise in Globalisation resulted the increase level of international business activitiesand yet led to the rise of exchange rate events. Exchange rate is the price of a country’scurrency expressed in another country’s currency or the rate at which one currency can beexchanged for another and this has to be taking into consideration by MultinationalCorporations like Blades Inc. as the Thai based entertainment retailer In another word,appreciation of exchange rate for one Dollar in terms of one Baht (fixed rate) would result indepreciation of the value of Baht. The changes in exchange rates are determined by thefactors of changes in interest rates, inflation, trade balance, political stability, internalharmony, high degree of transparency in the conduct of leaders and administrators, generalstate of economy, and quality of governance. The exchange rate is considered as the vitalfactor of any country’s economy and indication of the financial health.2.0 Currency Value’s Percentage Change Measuring Methods in ThaiBaht.Exchange rates and its fluctuation are important aspects involving in any types of businessespecially Multinational Corporations like Blades Inc. Role of regional managers of MNCsshould monitor closely the changes in rates from time-to-time with well understanding aboutthe “game”, be alert and cautious of the impacts and effects on the organisation’s cash flow.For instance, the MNC’s value can be affected by the changes in exchange rates due to thesum of cash sales received from their subsidiaries, and cash outflows reimburse for trade in.The exchange rate can be measured by calculating the once currency’s value based onanother currency. Of course, economic changes would significantly revolutionise theexchange rates.In the case study of Blades Inc., the managers should pay attention to the fluctuations of theThai baht compared to the US dollar. This is because the movements of the value of the Thaibaht will have an impact to the cash flow of the firm. A depreciation of the baht could resultto the decrease of a currency’s value, which decreases the income of a firm whilst anappreciation of Thai baht could result on the increase of the income of Blades Inc. Thisshows that when Thailand’s currency (Baht) value decline over United States’ currency (USAsia Pacific University of Technology & Innovation Page | 3
  • 4. Chan Chee Mang TP021569 BM024-3-3-ICFINDollar), there is intensification of the US Dollar compared to Baht which is the boost ofcurrency value of appreciation in US Dollar.However, at the same time, there will be difference in currency spot rate caused by thechanges in economic market. In addition, exchange rate movements can be measured bycomputing the change in percentage of foreign currency value which the difference would beending spot minus beginning spot divided by ending spot rate multiplied by hundred but thereare also separations in exchange rate determination considering the prospective of the specificcountry.To measure the percentage change of Thai Baht, Blades Inc. should consider the two maintypes of movements- direct and indirect. Direct exchange rates movement takes into accountthe difference in exchange rate value in home currency in terms of one foreign currency andin contrast, indirect exchange rate movements are foreign rates denoted into one homecurrency (Madura, 2012). The formula used is direct where ending spot minus beginning spotwhereas indirect is where beginning spot minus ending spot. Formula: % ∆ =S is the above formula is equivalent to the most recent spot rate while the spot rate at theearlier date is to be represented as St-1 (Madura, 2012). For the case study of Blades Inc.,assume that there is a change in Thai’s currency-Baht value from a value of $0.022 to $0.026,percentage change in Thai baht would be (S is equivalent to $0.026 and St-1 is equivalent to$0.022): Direct Approach:From the above calculation, Thai Baht is anticipated to appreciate by 18.18%. The positivepercentage has shown that Thai Baht will appreciate compared to US Dollar. Whereby, if thepercentage is negative shown, meaning that Thai Baht will depreciate comparative to USDollar (Madura, 2012).Asia Pacific University of Technology & Innovation Page | 4
  • 5. Chan Chee Mang TP021569 BM024-3-3-ICFIN3.0 Basic Factors That Determine the Value of Currency and ItsRelationships.Madura (2012) stated that there are 2 forces which influence the currency’s value on thesupply of the currency for sale and its demand. Like any kind of industry life cycle, supplyand demand would affect the movements of exchange rates and could be revealed in itsforeign exchange rate, meaning that the price of a currency has its own particular supply anddemand based on the country’s economic condition. Less demand in its currency would leadsto depreciation against the country that possesses stronger economies; in contrast, boosting ofcountry’s economy would elevate its currency value under the condition of withoutgovernment interference. In the case of Blades Inc., each value of the Thai Baht has adifferent supply and demand when exchanging to another currency like British Pounds, SouthKorean Won, Japanese Yen and so on especially in US Dollars. Furthermore, a high level ofdemand for any given currency increases the value of that particular currency while in case ofa higher supply compared to the demand; the value of the currency will decrease until there isa rise in demand and a decrease in supply (Madura, 2012).If the demand of any currency is higher when the value of that particular currency is low,MNC like Blades Inc. will tends to buy products at prices (more quantity) whereby thecurrency of the foreign country is less powerful compared to their own when the value of themanufacturer’s company is lower. For example, MNC firm like Tickle Me Elmo. When itwas initially launched, there was a high demand for it. Parents were crazily crushing eachother to grab it for their kids. As Elmo was rapidly sold out at stores, another alternative forpurchasing it would be through eBay which was sold at an incredibly overpriced. Elmo waspopular due to its demand which it would not be if no children would want it. In order to gainprofit in currency markets, investors would have to know where the appreciation of supplyand demand is, in the market. In the case study, if the value of the Thai Baht is $0.022,MNCs will tends to buy more products and services compared to the period whereby the ThaiBaht might be $0.026 whereby the products will be more expensive. Below figure 3.1 is thegraph shows the relationship between exchange rate and quantity (rate versus quantity), thedemand is curved downward.Asia Pacific University of Technology & Innovation Page | 5
  • 6. Chan Chee Mang TP021569 BM024-3-3-ICFIN Figure 3.1: Demand curve (CMSForex, 2012)While In terms of supply for a currency, the supply of any currency is usually higher whenthe value of that particular currency is higher (Madura, 2012). Furthermore, Madura (2012)also stated that there is a positive relationship between the value of a currency and the amountof that particular currency which is on sale. In the case study, when the Thai Baht is $0.026,Thai based firms will tends to exchange the Baht to US Dollars while purchasing Americanproducts and services. This measure will raise the supply of Thai Baht on the market. But ifthe Baht value is $0.022, the supply of the currency will be relatively lower. Below figure 3.2is a graph shows the relationship between exchange rate and quantity (rate versus quantity)with an upward curve. Figure 3.2: Supply curve (CMSForex, 2012)Another situation is Equilibrium when the supply of the currency is equal to the demand forthe currency. According to Madura (2012), equilibrium is a particular point where the supplyof the currency for sale is equal to its demand on the economy market. Considering if USAsia Pacific University of Technology & Innovation Page | 6
  • 7. Chan Chee Mang TP021569 BM024-3-3-ICFINinflation is higher than of Thai’s, the Thai people demanding for US products may depreciateand conversely US people demanding for Thai products may boost up to steer clear of thehigh US prices resulting in an upward pressure on the value of baht. In this case, the demandfor Thai Baht on sale at $0.022, then demand of the currency would be higher than the supplyof the currency. In contrast, the demand for Thai Baht for sale at a price of $0.026 would beless than the supply of the currency. In the case study of Blades Inc., the equilibriumexchange rate between US Dollars and Thai Baht would be $0.024 when the demand forcurrency is equal to the supply of the currency. Below figure 3.3 is a graph shows theequilibrium price when the demand of the currency is equal to the supply of the currency. Figure 3.3: Equilibrium of Prices.Asia Pacific University of Technology & Innovation Page | 7
  • 8. Chan Chee Mang TP021569 BM024-3-3-ICFIN4.0 Level of Inflation and Interest Rates affect the Baht Value inThailandInflation rates and interest rates have a considerable impact on the international trade activitywhich then affects the exchange rates (Madura, 2012). The changes in inflation and interestrates will affect the supply and demand of a country’s currency. For the case study of BladesInc., a high inflation rate and interest rate will lower the value of the Thai Baht. This isbecause the rise in the inflation might lead to Thai individuals and firms to buy product fromEast Asian countries such as Indonesia, India, and China or even the USA if the inflation ratewithin those areas are relatively lower. This will result in a higher demand of the differentforeign currencies like China Yuan, Japanese Yen, Indian Rupee, US Dollar and so on. Inreturn of this, the demand for local products will decrease and therefore resulting in adecrease of the demand for Thai Baht by other countries and thus Baht values are lowered.Inflation is referred as the rate at which the general level of prices for goods and services isrising, and subsequently, purchasing power is falling (Madura, 2012). Example, the babyboomer generation used to purchase daily products half of the price in the same early agemuch cheaper compared to generation X and Y. This shows that as years passed, prices haveradically increase and currency value has depreciated, and this is the scenario of inflationwhich is essentially caused by the demand and supply economic principle, and perceptionstowards value. In addition, currency value of a country is also influenced by consumerspending power and does not remain invariable during inflation.Meaning that high inflation will reduce spending power, enhances interest rates and yetreduce competitiveness resulting in depreciation of currency value. Also, enhancing thedemand for US products by Thai nation and the same goes for the demand in Dollars.Furthermore, there will also decrease for Thai products by American , resulting in incrementin supply of Baht for sale overpasses demand. High inflation rate also have an adverse impacton the different economic sectors of the country. Algrim and Darcy (2012), Braumann (2000)and Madura (2012) argued that there are several negative outcomes of high inflation rateswith commons findings of decrease in investments, lower wages, decrease in GDP per capita,reduced private consumptions and sharp declines in real money holdings and real outputs. Insummary, high inflation rates obligate consumers to purchase overseas or import products.In contrast, countries often achieve low inflation will lead to increase in currency value. Thisis because overly high inflation rates will jeopardize a country’s economy conditions, and actAsia Pacific University of Technology & Innovation Page | 8
  • 9. Chan Chee Mang TP021569 BM024-3-3-ICFINas a bullish sign diue to the drives of a strong force in its economy. Thai occurring highinflation levels would weaken Baht by increasing the import pricing leading to increase ofpricing in Thai materials and supplies affects the increase in prices of end products as well.Furthermore, in the case study of Blades Inc., a high level of interest rate in Thailand couldalso lead to an increase in the value of the Thai Baht and therefore appreciate compared toforeign currencies such as the US Dollar (assuming that the interest rates within America isthe constant). Thus, the rise of the interest rate attract US investors to have excess cash toinvest in Thailand. The rise in investment within Thailand will result into an increase in thedemand of the Thai Baht value to appreciate compared to the US dollar. For instance, thestability of the interest rate within the United States of America will make the US securitiesless appealing to the Thai investors which later selling US dollars and causes an increase inthe supply of the Dollars resulting the depreciation of the US dollar compared to the ThaiBaht.In addition, if the investors believe that the high inflation rate would be more influential thanthe interest rates, and yet causing depreciation of the Thai Baht, the investors will unwillingto operate in Thailand. At the same time, if the Central Bank of Thailand increases thecountry interest rates drastically, may have an adverse impact on the economy of the country.Also, the high interest rates will slow down the economic development of the country andenhance more investment from Thai firms to foreign countries with attractive interest ratesresulting lower percentage of local borrowing and operations.The 2 important keys of inflation and interest rates are determined by the supply and demandas the forces in determining the exchange even though countries secure their currency’sexchange value (Algrim and Darcy, 2012). For example, to purchase American products,Europeans are ought to supply Euro and to demand Dollar resulting in depreciation of Euroand appreciation of Dollar. If supply overpasses demand, value of euro would depreciate inforeign exchange market because government tends to increase lending by lowering loansinterest rate to encourage demand for their currency. In contrast, if demand overpasses supply,value of Euro would appreciate. The rise of one country’s currency supply is simultaneouslyrising of another country’s currency demand (Braumann, 2000).Asia Pacific University of Technology & Innovation Page | 9
  • 10. Chan Chee Mang TP021569 BM024-3-3-ICFIN Figure 4.1 The Global Economics Game, 2012The above figure 4.1 is the example of Global Economic Game. In further explanation, PointA is where French convert euro to dollar in banks to purchase American products. Eurodepreciates from $1.00 to $0.98. On the other hand, Dollar appreciates from €1.00 to €1.02 atpoint B. At point C, American convert dfrom Dollar to Euro in banks to purchase Franceproducts. Dollar depreciates from €1.02 to €1.00. At the same time, Euro appreciates to itsoriginal $1.00. If both supply and demand is equal, both countries would have an evenexchange rate. In contrast, if supply and demand does not stabilize, there would befluctuation in exchange rate.For the case study of Blades Inc., high interest rate levels in Thai would result in appreciationof Baht value relative to dollar influencing US investors to be more tempted to invest in Thai.This would enhance the demand for Thai Baht. The supply of dollars for sale wouldoverpasses the demand as Thai investors would not be tempted by the US. In return,considering if Thai’s inflation will affect the depreciation of Baht value might causes USinvestors reluctant in investing in Baht-denominated securities. Furthermore, inflation can bedriven by low interest rates as the increase of pricing which is driven by low interest forcingsurplus money into economy. To prevent the adverse effects of high inflation rate, the Centralbank of Thailand and its government should closely monitor the inflation rate in order tocalm the market (Braumann, 2000).Asia Pacific University of Technology & Innovation Page | 10
  • 11. Chan Chee Mang TP021569 BM024-3-3-ICFINInterest rate movements will influence the currency value of loans through the impact ondemand and supply resulting cash loses its value continuously. In United States, demand andsupply of currency affects the quantity and pricing of products and services that arepurchased and sold, and yet interest rate help identify the upcoming return of investment forpurchasing loans now.5.0 Losing confidence in Thai Baht and the effectsSome speculators had foreseen the Thailand’s weak economy influenced by the declination ofcapital inflows in the country. Thus, the foreign investors began to shift their directionstogether with the direct capital. The withdrawal of funds from the country-Thailand willcauses depreciation of demand and currency’s value of Baht. This is seen in the AsianFinancial Crisis in the year 1997 that Thailand was having the fixed or semi-fixed exchangerates resulted downward pressure in Thai’s Baht of currency speculative attacks. Furthermore,the appreciation of home interest rates has also influence nation to acquire loans heavily atlower interest rates resulting the happens of poor oversight of home lending such asincrement of public debt contribute to crisis.At the current situation many foreign investors lost their interest and confidence in the ThaiBaht. The withdrawal of the capital funds increase the movements in velocity of money,money supply and actual productivity of economy, will result in the depreciation of thecurrency as the investors are withdrawing their currency thus leading to an increase in thesupply of the Thai Baht on the market and yet hyperinflation.For example, Germany went through deflationary collapse in 1920 (Carbonnel, E., 2008). Itwas getting tougher and tougher for its citizens to obtain money to purchase necessities.MNCs were challenged with having to pay by cash for their materials with banks running lowon money and not honoring checks. German government anxiously printed money as aneffort to re-inflate the economy fearing that a collapse will increase in unemployment. Apartfrom the government’s effort of printing money, its currency value appreciated comparativeto other currencies resulting in decrease of 50% on imported products. German people lostconfidence in their currency due to the high velocity of money supply, economy downturn,and huge foreign debt.Asia Pacific University of Technology & Innovation Page | 11
  • 12. Chan Chee Mang TP021569 BM024-3-3-ICFINIn Blades Inc. case, the changes in the currency’s value of Baht will directly affect the firm asThai people are one of their major consumers. Furthermore, it is stated that the deal is at afixed price denominated in Baht. As the value of Baht weakens compared to Dollar, it wouldnegatively impact the Blades’ income. When the firm does a conversion on its profit fromforeign currency-Baht to its home currency Dollar, there will be a decrease in receivableamount of Baht per Dollar. Meaning the income perceived is depreciated compared topreceding sales. In this situation, Blades Inc. should reflect on negotiating back on the termswith Diversified Entertainment Products to reduce the economic risk.6.0 Interest rate prevent further changes in the currency’s valueTo stop the withdrawling and drastic fluctuations of the Baht value, the Thailand CentralBank- Bank of Thailand (BOT) should set up policies which would reduce the motivation ofinvestors to leave. An example of most secured solution is to increase the current interestrates of the country.Interest rate is one of the most important macroeconomics variables which are directly relatedto the economic growth. Generally, interest rate is considered as the cost of capital, that is,the price paid for the use of money within a specific time period. From the point of view of aborrower interest rate is the cost of borrowing money-borrowing rate, while on the lender’spoint of view, interest rate is the fee charged for lending money-lending rate (Allam and Udin,2009).According to Madura (2012), interest rates greatly influence investment in foreign securities.Meaning that the changes in the interest rates have an impact on the equilibrium of thecurrency of the country. In further statement, the increase in the interest rate in any countrywill also increase the appreciation demand of Thai country’s currency and decrease thedemand for foreign deposits resulting an increase in exchange rate of the country’s currency.BOT has to be aware of the possibilities of home investors shifting money to other countrywith higher interest rates. This is because depreciation of interest rates encourages inflation.For the case study, assuming the interest rate for US is 3.5% and Thai is 5%, investors wouldbenefit by shifting funds from securities denominated from Dollar to Baht and thereforeresulting upward pressure in appreciation of demand for Baht and supply for Dollar wheninvestors will get more Baht per Dollar in coversion and increases the import prices. InAsia Pacific University of Technology & Innovation Page | 12
  • 13. Chan Chee Mang TP021569 BM024-3-3-ICFINaddition, the difference of interest rates would affect the supply and demand of currency andchange in equilibrium value.7.0 ConclusionIn conclusion, exchange rate is the main factor of global industry framework, the countryCentral Banks and Multinational Corporation should be alert and be cautious! This is becauseexchange rate may severely impacts all business opreations in foreign countries includingMNC like Blades Inc operating in Thailand. Also, well understand in the fluactuation ininflation, interest rate, supply and demand movements will benefit firms like Bladespreventing risk in losses in income due to in depreciation of currency value.Although suggestion on the increase of interest rate is given to attract more Foreign DirectInvestment (FDI) and reduces withdrawal of funds, the BOT still need to be more carefulwhen raising the interest rates. This is because an excess in the difference of the interest ratemight have an adverse impact on local investors and borrowers and even lower the operationof foreign investors in the country.Asia Pacific University of Technology & Innovation Page | 13
  • 14. Chan Chee Mang TP021569 BM024-3-3-ICFIN8.0 References8.1 Offline ResourcesAhlgrim, K.C and Darcy, S.P. (February 2012). The Effect of Deflation or High Inflation onthe Insurance Industry. Casualty Actuarial Society, Canadian Institute of Actuaries, Societyof Actuaries. pp1-30.Allam, M.M and Udin,G.S.. (2009). Relationship between interest rate and stock price:Emperical evidence from developed and developing countries. . International journal ofbusiness and management. 4 (3), pp43-51.Baumann, B., 2000, Real Effects of High Inflation, WP/00/85, IMF Working Paper, WesternHemisphere Department, International Monetary FundBeirne,J. Caporale,G.M. and Spagnolo,N.. (2009). Market, Interest Rate and Exchange RateRisk Effects on Financial Stock Returns: A GARCH-M Approach. Quantitative andQualitative Analysis in Social Sciences. 3 (2), pp 44-68.CMSforex. (2012). Exchange Rates and Supply and Demand. Available:http://www.cmsfx.com/en/forex-education/online-forex-course/chapter-2-fundamental-factors/exchange-rates-supply-and-demand/supply-and-demand/. Last accessed 8th October2012Juster F.P and Watchel,P.. (1972). A note on Inflation and saving rate. Rrnnkins,v Panprs onEconomic Activitvy. pp765-778.Madura, J., 2012, International Corporate Finance, 11th Edition, South Western, CengageLearningMoffett, M., H., Stonehill, A., I., Eiteman, D., K., 2012, Fundamentals of MultinationalFinance, 4th Edition, Pearson, Upper Saddle River, New JerseyRatprasatporn,P. and Thienpreecha. (2002). FOREIGN INVESTMENT IN THAILAND:REVIEW OF THE CURRENT LEGISLATIVE REGIME. Tilleke & Gibbins International. sSloman, J., 2006, Economics, 6th Edition, Prentice Hall, HarlowTaylor,M.P.. (1995). The Economics of Exchange Rates. Journal of Economic Literature. 33pp13-47.Asia Pacific University of Technology & Innovation Page | 14
  • 15. Chan Chee Mang TP021569 BM024-3-3-ICFIN8.2 Online ResourcesAsmundson, I. & Oner, C. (2012) What Is Money? [online]. Available at:http://www.imf.org/external/pubs/ft/fandd/2012/09/basics.htm [Accessed 10 October 2012]Biz/ed (2012) The Impact of a Rise in Interest Rates on UK Sterling Exchange Rate [online].Available at:http://www.bized.co.uk/learn/economics/govpol/macropolicies/interest/exchange/index.htm?page=4 [Accessed 10 October 2012]Bofah, K. (2012) The Effects of Interest Rates on Currency Rates [online]. Available at:http://www.ehow.com/facts_6005312_effects-interest-rates-currency-rates.html [Accessed 10October 2012]Business Dictionary (2012) Exchange Rate [online]. Available at:http://www.businessdictionary.com/definition/exchange-rate.html [Accessed 10 October2012]Carbonnel, E. (2008) How Inflation Creates Hyperinflation [online]. Available at:http://www.marketskeptics.com/2008/12/how-deflation-creates-hyperinflation.html[Accessed 10 October 2012]CMSForex (2012) Lesson 4: Exchange Rates and Supply and Demand [online]. Available at:http://www.cmsfx.com/en/forex-education/online-forex-course/chapter-2-fundamental-factors/exchange-rates-supply-and-demand/supply-and-demand/ [Accessed 10 October 2012]Erik (2012) How can inflation affect currency trading in the forex market? [online]. Availableat: http://www.ikonfx.com/forexblog/how-inflation-affects-currency-trading/ [Accessed 10October 2012]eToro Online Forex Trading (2012) How inflation and deflation affect currency fluctuation[online]. Available at: http://www.etoro.com/education/how-inflation-and-deflation-affect-currency-fluctuation.aspx [Accessed 10 October 2012]Federal Reserve Bank of San Francisco (2003) Is Official Foreign Exchange InterventionEffective? [online]. Available at:http://www.frbsf.org/publications/economics/letter/2003/el2003-20.html [Accessed 10October 2012]Asia Pacific University of Technology & Innovation Page | 15
  • 16. Chan Chee Mang TP021569 BM024-3-3-ICFINForex traders (2011) The Impact of Inflation Measures on the Forex Market [online].Available at: http://www.forextraders.com/forex-strategy/the-impact-of-inflation-measures-on-the-forex-market.html [Accessed 10 October 2012]Grabianowski, E. (2012) What exactly is inflation? [online]. Available at:http://money.howstuffworks.com/question737.htm [Accessed 10 October 2012]Hansen, S. W. (2006) Supply and Demand in Currency Markets [online]. Available at:http://www.forbes.com/2006/08/23/forex-trading-education-in_swh_0823investools_inl.html[Accessed 10 October 2012]Investopedia (2007) How do central banks inject money into the economy? [online].Available at: http://www.investopedia.com/ask/answers/07/central-banks.asp [Accessed 10October 2012]Investopedia (2009) Forces Behind Interest Rates [online]. Available at:http://www.investopedia.com/articles/03/111203.asp [Accessed 10 October 2012]Investopedia (2010) 6 Factors That Influence Exchange Rates [online]. Available at:http://www.investopedia.com/articles/basics/04/050704.asp [Accessed 10 October 2012]Investopedia (2012) Exchange Rate [online]. Available at:http://www.investopedia.com/terms/e/exchangerate.asp [Accessed 10 October 2012]Investopedia (2012) Forex Walkthrough; Level 5 Economics – Inflation [online]. Available at:http://www.investopedia.com/walkthrough/forex/intermediate/level5/inflation.aspx[Accessed 10 October 2012]Investopedia (2012) Inflation [online]. Available at:http://www.investopedia.com/terms/i/inflation.asp [Accessed 10 October 2012]Lien, K. (2012) Why Central Banks and Interest Rates are so Important [online]. Available at:http://finance.yahoo.com/education/currencies/article/106078/Why_central_banks_and_interest_rates_are_so_important [Accessed 10 October 2012]Madura, J. (2012) International Financial Management, 11th Edition, South-Western,Cengage LearningAsia Pacific University of Technology & Innovation Page | 16
  • 17. Chan Chee Mang TP021569 BM024-3-3-ICFINMindXpansion (2008) Factors Influencing Currency Exchange Rates [online]. Available at:http://www.mindxpansion.com/forex/factors_influencing_currency_exchange_rates.php[Accessed 10 October 2012]Ministry of Finance Japan (2012) Chapter 1: Causes and characteristics of the AsianCurrency Crises [online]. Available at:http://www.mof.go.jp/english/about_mof/councils/customs_foreign_exchange/report/e1a703d.htm [Accessed 10 October 2012]Nolan, M. (2007) Higher interest rates – stronger currency? [online]. Available at:http://tvhe.wordpress.com/2007/11/22/higher-interest-rates-stronger-currency/ [Accessed 10October 2012]Piana, V. (2001) Exchange Rate [online]. Available at:http://www.economicswebinstitute.org/glossary/exchrate.htm [Accessed 10 October 2012]Roos, D. (2012) How interest rates work [online]. Available at:http://money.howstuffworks.com/interest-rate4.htm [Accessed 10 October 2012]Russell, J. (2012) Supply & Demand: How They Move Currencies [online]. Available at:http://forextrading.about.com/od/fundamentalanalysis/a/supplydemand_ro.htm [Accessed 10October 2012]Scharinger, J. (2012) Thailand in the Face of the 1997 Asian Crisis and the Current FinancialCrisis: An Interview With Johannes Dragsbcek Schmidt [online]. Available at:http://www.seas.at/aseas/3_1/ASEAS_3_1_A6.pdf [Accessed 10 October 2012]The Economist (2007) Ten years on: How Asia shrugged off its economic crisis [online].Available at: http://www.economist.com/node/9432495 [Accessed 10 October 2012]The Global Economics Game (2012) The Foreign Exchange Market [online]. Available at:http://www.worldgameofeconomics.com/exchangerates.htm [Accessed 10 October 2012]Wolfe, M. (2012) How Interest Rates Affect Currency [online]. Available at:http://www.ehow.com/info_8106415_interest-rates-effect-currency.html [Accessed 10October 2012]9.0 Appendixes (refer to the CD)Asia Pacific University of Technology & Innovation Page | 17

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