Monetary policy: A Monetary Expansion Under Floating Exchange Rates: An increase in the money supply shifts the LM* curve to the right, lowering the exchange rate and raising income.. Th
THEORETICAL FOUNDATIONS
Exchange rate
- The exchange rate between two countries is the price at which residents of those countries trade with each other
- Economists distinguish between two exchange rates: the nominal exchange rate and the real exchange rate
The nominal exchange rate represents the relative value of the currencies of two countries, often referred to simply as "the exchange rate." For instance, if the exchange rate between the U.S dollar and the Japanese yen is 120 yen per dollar, it means one dollar can be exchanged for 120 yen in global foreign currency markets This exchange rate can also be expressed as 0.00833 dollars per yen (1/120).
The real exchange rate represents the relative price of goods between two countries, indicating the rate at which goods from one nation can be exchanged for those from another.
Real Nominal Ratio of Exchange = Exchange × Price Rate Rate Level
The exchange rate serves as a crucial metric for evaluating the purchasing power of a domestic currency against foreign currencies, enabling comparisons of domestic goods prices and labor productivity internationally Additionally, it significantly influences a country's import and export activities.
The Mundell–Fleming model portrays the short-run relationship between an economy's nominal exchange rate, interest rate, and output
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- Under a system of floating exchange rates:
- Floating exchange rates: the exchange rate is set by market forces and is allowed to fluctuate in response to changing economic conditions
At any given value of a fiscal expansion increases , shifting e, Y IS* to the right
In a small open economy with perfect capital mobility, fiscal policy cannot affect real GDP Monetary policy:
A Monetary Expansion Under Floating Exchange Rates: An increase in the money supply shifts the LM* curve to the right, lowering the exchange rate and raising income
IS LM great depressionMacroeconomics 2 None4
At any given value of , a tariff or quota reduces imports, increases e NX, and shifts IS* to the right
Import restrictions cannot reduce a trade deficit
Even though NX is unchanged, there is less trade: the trade restriction reduces imports; the exchange rate appreciation reduces exports
- Under a system of fixed exchange rates:
A fixed exchange rate system involves the central bank setting a specific value for the exchange rate and actively engaging in the market to buy or sell domestic currency, ensuring that the exchange rate remains stable at the announced level.
Under fixed rates, fiscal policy is very effective at changing output
Under fixed rates, monetary policy cannot be used to affect output
Under fixed rates, import restrictions increase Y and NX But, these gains come at the expense of other countries: the policy merely shifts demand from foreign to domestic goods
1.4 Theories of Exchange Rate Determination
The mint parity theory posits that under a gold standard, exchange rates remain closely aligned with the ratio of gold values, known as mint parity or par This means that the exchange rate among gold standard countries is influenced by the gold equivalents of their respective currencies.
In the analysis of foreign exchange depicted in Fig 22.6, the horizontal axis represents the amount of foreign exchange while the vertical axis indicates the exchange rate The demand and supply curves for foreign exchange are illustrated as DD1 and SS1, respectively The equilibrium exchange rate between the dollar and pound sterling is established at point E, where the DD1 and SS1 curves intersect.
The equilibrium exchange rate is identified as OR, where the demand and supply of foreign exchange equal OQ The horizontal line at M represents the mint parity, which is £1 to $4 It is important to note that the mint parity does not always align with the market exchange rate.
The horizontal lines at points U and L represent the gold export point (upper specie point) and the gold import point (lower specie point), respectively The segment S1 of the supply curve SS1 aligns with the upper specie point.
When the exchange rate drops below the lower specie point, the importing country favors importing gold from the exporting country Consequently, the exchange rate is confined within the upper and lower specie points, also known as the gold-export and gold-import points.
1.4.2 The purchasing power parity theory
Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries
The exchange rate between two countries should reflect the ratio of their price levels for a fixed basket of goods and services When a country experiences inflation and its domestic price level rises, its exchange rate must depreciate to align with Purchasing Power Parity (PPP).
Relative purchasing power parity (RPPP) is an economic theory suggesting that exchange rates and inflation rates between two countries should converge over time Unlike absolute PPP, which is static, RPPP offers a dynamic perspective on how price levels influence currency values.
- Absolute purchasing power parity (APPP) is the basic PPP theory, which states that once two currencies have been exchanged, a basket of goods should have the same value,
1.4.3 The balance of payments theory
The balance of payments theory asserts that the exchange rate is influenced by the dynamics of demand and supply in the foreign exchange market, determining the value of foreign currency in relation to domestic currency Consequently, the external value of a nation's currency is directly tied to the levels of demand and supply for that currency.
1.4.4 The Monetary Approach to Rate of Exchange
The monetary approach views exchange rates as relative prices of currencies influenced by stock equilibrium in currency markets, while traditional methods emphasize that exchange rates are determined by the flow of currency markets.
Changes in market inflation cause changes in currency exchange rates A country with a lower inflation rate than another's will see an appreciation in the value of its currency The
Low inflation rates lead to a slower increase in the prices of goods and services, which often results in a stronger currency value for a country Conversely, countries experiencing higher inflation tend to see their currency depreciate, typically accompanied by elevated interest rates.
Interest rates significantly influence exchange rates, as fluctuations in interest rates directly impact currency value and dollar exchange rates The correlation between forex rates, interest rates, and inflation is crucial; when interest rates rise, a country's currency tends to appreciate This appreciation occurs because higher interest rates offer better returns to lenders, attracting increased foreign capital and consequently driving up exchange rates.
- Country's Current Account / Balance of Payments
Interest rate and inflation
Interest rates represent the cost of borrowing money and are typically expressed as a percentage of the total amount borrowed; for instance, a bank might charge 5% interest annually on a 30-year mortgage Additionally, interest rates indicate the returns earned on savings in a bank or investments in assets such as government bonds.
Inflation is the rate at which prices for goods and services rise and is measured as an annual percentage increase
2.3 Relationship between Interest rate and inflation
Inflation reflects an increase in the cost of living, signaling economic growth However, if inflation outpaces wage growth, the government may respond by raising interest rates This strategy discourages borrowing and promotes saving, ultimately slowing down the economy and reducing inflation.
To stimulate the economy, interest rates may be reduced, allowing individuals to borrow more money and increase their spending power This increase in consumer spending can lead to economic growth and a rise in inflation.
In short, inflation is one of the indicators used to measure economic growth, which can be controlled by interest rates, which in turn affect inflation.
Monetary policy
Central banks utilize monetary policy to regulate the money supply within a nation's economy, adjusting the availability of currency and credit This strategic approach aims to maintain stability in inflation, promote economic growth, and support employment levels.
Depending on the economic circumstance, monetary policy may be categorized in one of two ways: expansionary monetary policy or contractionary monetary policy
An expansionary monetary policy is a macroeconomic strategy designed to enhance monetary supply to stimulate domestic economic growth By increasing the money supply, this policy encourages consumer spending and boosts capital investments from businesses, fostering overall economic development.
- Lower the short-term interest rates
- Expand open market operations (buy securities)
3.1.3 Effects of an Expansionary Monetary Policy
An expansionary monetary policy reduces the cost of borrowing Therefore, consumers tend to spend more while businesses are encouraged to make larger capital investments
Injecting extra money into the economy can lead to higher inflation levels, which has both positive and negative implications While a significant rise in the money supply may cause unsustainable inflation, it can also help avert deflation, a phenomenon that could be more harmful than moderate inflation.
An increase in the money supply leads to a depreciation of the local currency, which enhances the economy's export potential by making exports more affordable and appealing to international markets.
The stimulation of capital investments creates additional jobs in the economy Therefore, an expansionary monetary policy generally reduces unemployment
A contractionary monetary policy aims to decrease monetary expansion to combat inflation, which signals an overheated economy often following prolonged economic growth By reducing the money supply, this policy seeks to curb excessive speculation and prevent unsustainable capital investments.
3.2.2 Tools for a Contractionary Monetary Policy
- Increase the short-term interest rate (discount rate)
- Expand open market operations (sell securities)
3.2.3 Effects of a Contractionary Monetary Policy
Contractionary monetary policy primarily aims to control inflation levels by decreasing the money supply within the economy This strategic reduction is intended to lower inflation rates and stabilize overall prices, ensuring a more balanced economic environment.
Reducing the money supply typically leads to a slowdown in economic growth, as a decrease in available funds causes individuals and businesses to postpone significant investments and capital expenditures Consequently, companies tend to reduce their production levels, further impacting economic activity.
A contractionary monetary policy can lead to increased unemployment as the economic slowdown and reduced production result in companies hiring fewer employees Consequently, this leads to a rise in overall unemployment rates within the economy.
CAUSES AND IMPACTS OF THE YEN’S DEPRECIATION
Overview about the Yen’s depreciation in 2022
Dollar Yen Exchange Rate (USD JPY) in 2022
Despite signs of recovery in the global economy and Japan following the Covid-19 pandemic, key global currencies, including the Yen, have recently experienced a decline in exchange rates, even amidst government recovery efforts.
Japan has long sought to enhance its sluggish economic growth through a strategy aimed at achieving stronger inflation and a weaker yen, as envisioned by its central bank However, this approach has fallen short of expectations, with inflation consistently failing to reach the government's modest targets, despite historically low interest rates and various fiscal stimulus initiatives Consequently, workers' wages have stagnated, and overall economic growth has remained disappointingly low.
Inflation remains moderate overall, but rising food and energy costs are driven by market turmoil linked to the pandemic and Russia's invasion of Ukraine The Japanese yen has hit a two-decade low, plummeting over 18% since September, which has raised concerns among Japanese businesses The ongoing military conflict in Ukraine has caused a surge in natural resource prices, contributing to global inflation By the end of 2021, the yen had already fallen 11.6% against the dollar, and in April 2022, it continued to decline by nearly 6% Notably, on April 13, 2022, the yen dropped to its lowest value since May 2002, trading at 126 yen per dollar, and further decreased to 129.4 yen per dollar by April 27, 2022, marking another record low.
Causes for the Japanese Yen’s Depreciation in 2022
2.1 Monetary policy of the Central Banks of Japan and the United States The yen depreciated also due to the differences in the interest rate between the two countries The Bank of Japan (BOJ) maintains the super-loose monetary policy (quantitative easing) while the US Federal Reserve Bank (FED) continues to raise the interest rate to deal with inflation
2.1.1 Loose monetary policy of Japan
Since Prime Minister Shinzo Abe's tenure, monetary policy has been a key component of Abenomics, particularly through "quantitative easing" aimed at combating Japan's prolonged deflation The COVID-19 pandemic exacerbated economic challenges, negatively impacting growth and increasing unemployment Despite these issues, domestic inflation remained low until April 2022, when Japan experienced a sudden rise in inflation This occurred alongside significant government stimulus packages and the Bank of Japan's ultra-loose monetary policy, all while rising crude oil prices posed additional concerns for the nation's economic recovery.
The inflation rate of Japan from June 2021 to April 2022
Japan's inflation is rising gradually compared to the significant increases seen in the US and Europe, where economic recovery post-pandemic has driven prices up The Japanese government attributes this inflation primarily to escalating energy and commodity prices, which are straining household budgets Consequently, rising consumer prices are pressuring the Bank of Japan (BOJ) to consider raising interest rates to manage inflation Nonetheless, the BOJ has opted to maintain its extensive monetary stimulus in an effort to stabilize inflation at 2%, despite the impact of a weaker yen on food and energy costs.
The ongoing depreciation of the Yen poses significant challenges for the Japanese economy, leading to increased import costs for essential raw materials like crude oil and grains, which in turn diminishes corporate profits and heightens the economic burden on households Despite these adverse effects, the Ministry of Finance and the Bank of Japan remain passive regarding the Yen's decline, primarily due to the substantial amount of government bonds issued, which prevents interest rate hikes Raising interest rates would result in immediate increases in interest payments, jeopardizing financing and potentially triggering a financial collapse Consequently, Japan's quantitative easing measures appear less as economic stimuli and more as a strategy to maintain low interest rates, reflecting a broader effort to manage its financial stability.
21 interest rates to zero through quantitative easing to limit interest payments on government bonds
2.1.2 Tightening monetary policies of the USA
While the BOJ carried out a large-scale monetary easing policy, despite concerns about the
The prolonged low interest rate environment has led to negative side effects, particularly affecting bank profitability In response, the US Federal Reserve (FED) has adopted a tight monetary policy to manage rapid economic growth, raising the basic interest rate to a current range of 0.75% - 1% According to the Wall Street Journal, this decision is driven by the resurgence of business activities, heightened consumer demand, and a decline in COVID-19 infections across the US.
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During the COVID-19 pandemic, the Federal Reserve's monetary easing and the US government's fiscal stimulus injected over $5 trillion into the economy, causing the FED's balance sheet to more than double This influx of money, coupled with supply chain disruptions and increased demand as economies reopened, led to a significant rise in inflation, with the US consumer price index (CPI) surging 8.5% year-on-year in March—the highest increase since 1982 These developments have raised concerns about a potential recession, prompting the FED to adjust interest rates to mitigate the risks of inflation and economic downturn.
When there is a disparity in interest rates between two countries, such as country A having higher rates than country B, the currency of country B is likely to depreciate In this context, the depreciation of the Japanese Yen is significantly influenced by these interest rate differentials.
22 differences between the two monetary policies of Japan and the USA, in which the interest rate of Japan is much lower than that of the USA
2.2 The increasing amount of JPY sold and USD bought
2.2.1 The increasing amount of JPY sold
The trend of Japanese companies pursuing mergers and acquisitions overseas leads to an increased demand for foreign currency, as businesses require these funds to acquire foreign entities Consequently, this activity results in a rise in the circulation of yen within the domestic market.
Japan's oil consumption is entirely reliant on imported crude oil, leading to a continuous rise in oil prices To cover the escalating import costs, Japan must purchase foreign currencies like the USD while selling yen, resulting in an increased supply of yen in the market.
2.2.2 The increasing amount of USD bought
Rising oil prices have driven increased demand for the US dollar, contrasting with the yen's weaker performance in Japan Inflation expectations in the US have surged as a result of these escalating oil costs The pandemic's impact led to a halt in oil production, causing oil contract prices to soar throughout 2021 Consequently, the heightened demand for oil, coupled with its scarcity, has resulted in a significant increase in USD purchases to manage these soaring prices.
The increasing demand for the US dollar can be attributed to the rising US bond yields While government bonds are generally considered a safe investment, they typically offer lower returns compared to other assets However, the Federal Reserve's announcement of record high interest rates has made these bonds more attractive to investors, leading to greater purchases of the dollar.
US government bonds from a safe place have now become an extremely attractive investment channel, both safe and profitable This leads global investors to buy greenbacks to buy US bonds
Impacts of the Japanese Yen’s Depreciation in 2022
3.1 Impacts on Japan’s international trade
Depreciation significantly impacts the economy by influencing the trade of goods, particularly in imports and exports When the currency of an exporting country depreciates, importing nations benefit from reduced costs, requiring less foreign currency for purchases Consequently, this price reduction typically leads to an increase in export volumes, as customers in the destination country face lower prices.
In Japan, export prices in yen have shown significant volatility, closely mirroring fluctuations in exchange rates, unlike export prices denominated in contract currency.
A significant percentage of export contracts are denominated in US dollars, which account for 49.5% of the total, surpassing the Japanese yen's share of 37.3%, as illustrated in Figure 2.
In the short term, the depreciation of the yen is likely to benefit Japanese exporters by increasing export values rather than volumes, as stable export volumes will yield higher prices in yen If the price of Japanese exports in dollars remains unchanged despite the yen's decline, export sales are expected to rise.
A weak yen presents a significant opportunity to boost Japanese exports, which were once a source of concern due to their affordability The current depreciation of the yen makes Japanese goods more competitively priced, potentially increasing exports in a way that benefits inflation-affected economies like the United States Therefore, a weaker Japanese currency is advantageous for both Japan and the U.S economy.
Despite the common belief that a falling yen benefits exporters, the current situation reveals the contrary Many businesses, particularly small and medium-sized enterprises, are grappling with rising input material costs exacerbated by the COVID-19 pandemic Their limited negotiating power means that necessary expenses are elevated, and profits are not guaranteed to rise alongside currency depreciation Consequently, the actual added value remains stagnant, leading to no increase in profits or wages for workers.
The Japanese yen plays a minor role as an import contract currency, leading to the predominance of other currencies, particularly the US dollar, in setting export prices.
A depreciation of the Yen leads to increased import prices, resulting in lower revenue from imported goods As the Yen weakens against foreign currencies, importing industries face higher costs when purchasing from exporters This situation exacerbates the challenges these industries already face, as they struggle to pass on rising input costs to consumers amidst weak domestic demand and negative output differentials.
When the domestic currency depreciates against foreign currencies, it leads to increased prices for goods A weaker yen, in particular, raises energy and commodity costs, negatively impacting both businesses and consumers Japan's energy importers are warning that the declining yen is worsening the issue of rising fuel expenses, potentially harming their profits and leading to higher costs for consumers.
The overall effect of currency depreciation on the economy hinges on two key factors: first, how it influences the volume of exports and imports, and second, its impact on the pricing of these exports and imports.
The depreciation of currency can lead to a decrease in import volumes, while export volumes may remain unaffected, indicating a potential positive impact on the economy.
The effect of currency depreciation on export and import prices is influenced by two key factors: the extent of price increases for exports compared to imports, and the relative volume of goods exported versus imported.
The US dollar is predominantly used as the contract currency for imports rather than exports, leading to a significant impact on pricing Consequently, the depreciation of the yen against the US dollar results in a more substantial increase in import prices in yen compared to export prices.
In addition to reinforce this, Figure 3 shows that, since mid-2020 imports have tended to exceed exports As a result, the trade account balance has turned deficit from the same period
Import prices are likely to exert a greater influence on the economy compared to export prices, indicating that the economy may experience adverse effects from deteriorating terms of trade and declining real income.
Exchange rate fluctuations significantly affect not only the trade in goods but also trade in services, particularly in the tourism sector A depreciation of the yen makes Japan a more attractive destination for foreign tourists while discouraging Japanese citizens from traveling abroad due to increased costs This shift results in decreased spending by outbound tourists, categorized as a decline in imports, and increased spending by inbound tourists, classified as an increase in exports, ultimately benefiting the economy.
When the yen depreciates, price competitiveness in the countries Japan exports to will increase, exports will increase, so the profits of exporting companies will also increase As
Forecasts for the Yen's depreciation
Experts are divided on the future of the Japanese Yen, with many predicting a significant decline that could lead to a severe economic downturn in Japan Conversely, some specialists argue that the Yen's depreciation is temporary and that Japan's economy will gradually recover This division of opinion highlights the uncertainty surrounding the Yen's trajectory and its implications for Japan and the global economy.
In April 2022, the IMF revised Japan's economic growth forecast for 2022 down to 2.4%, a decrease from the previous estimate of 3.3% Concurrently, Japanese policymakers adjusted their GDP growth forecast for the fiscal year 2022 to 2.9%, down from 3.8% in January 2022 Additionally, inflation expectations for the same fiscal year were raised to 1.9%, up from an earlier prediction of 1.1%.
A Bloomberg expert survey predicts that the Yen exchange rate will remain stable at 128 yen per dollar by the end of 2022 In contrast, some analysts from Commerzbank and Societe Generale anticipate a potential decline, forecasting the yen could weaken to 150 yen per dollar by year-end.
On April 18, Governor of the Bank of Japan (BoJ) Haruhiko Kuroda warned that the recent
The significant decline in the yen's value against the dollar poses risks to corporate business strategies and threatens Japan's fragile economic recovery Experts are concerned that this depreciation may hinder the nation's recovery efforts, as escalating food and energy prices negatively impact personal consumption, a crucial component of the Japanese economy.
Japanese Finance Minister Shunichi Suzuki has expressed concerns that the recent decline in the yen's value could negatively impact the economy He described the yen's depreciation against the dollar as "bad," highlighting that rising raw material prices and stagnant wage growth are detrimental to demand.
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Markets are speculating that the Bank of Japan (BOJ) may adjust its guidance on interest rates to a more neutral stance to address the weakening yen However, sources indicate that the BOJ is unlikely to rush into any changes as the economy has yet to recover to pre-pandemic levels The central bank has no plans to use monetary policy tools to directly intervene in yen declines, as this could be seen as currency manipulation Raising interest rates or signaling such actions could negatively impact the economy The BOJ will only consider modifying its dovish stance if the yen's depreciation, combined with other inflationary pressures, leads to sustained inflation around its 2% target If inflation continues to rise and alters long-term expectations, there may be potential for adjustments to the BOJ's stimulus policy.
Japan is currently facing significant inflation, prompting the government to implement a subsidy of up to 25 yen per liter for gasoline suppliers to mitigate price increases, although this limit was quickly reached While wages are anticipated to rise in the spring, they are expected to lag behind the rising prices Experts warn that Japan may enter a "dark age" characterized by increasing prices without corresponding growth in stock prices or wages Consequently, office workers may resort to preparing their own meals, as affordable lunch options are scarce, leading to a rise in "bento danshi," or men who bring homemade lunches to work Additionally, the cost of drinks at super-discount pubs has risen, limiting visits to once a week With a current exchange rate of 1 dollar to 130 yen, the absence of foreign staff in convenience stores and pubs means that customers will need to serve themselves.
The 130 yen level represents a contentious threshold, but it is anticipated that the yen will eventually surpass this mark, potentially reaching 150 yen We are on the brink of entering an era characterized by significant yen devaluation.
While some analysts predict further depreciation of the Yen, ANZ Bank suggests that significant declines in the US stock market could lead to falling US Treasury yields, diminishing the US dollar's appeal Meanwhile, Shinkin Asset Management anticipates a potential recovery of the Yen to 125 yen per dollar.
Japan's Finance Minister, Suzuki, emphasized that authorities are vigilantly monitoring the weakening yen's impact on the economy to maintain currency market stability He reaffirmed Japan's commitment to the G7 currency agreement and stressed the importance of collaborating with US and global monetary authorities to respond appropriately to currency fluctuations Meanwhile, Bank of Japan Governor Kuroda maintained that a low yen benefits the Japanese economy by boosting exporters' profits, despite increasing import costs due to Japan's limited resources The yen's sharp decline has sparked speculation about potential government and BoJ interventions, such as buying yen and selling dollars.
Lessons for Vietnam
The primary duty of central banks worldwide is to protect the value of money, and in Vietnam, the government has tasked the State Bank of Vietnam with ensuring that credit institutions meet the capital needs of businesses efficiently This involves expediting administrative processes to enhance loan accessibility for customers and implementing support measures for those affected by the COVID-19 pandemic Key solutions from the State Bank include lowering operating interest rates to guide lending rates, facilitating reductions of 0.5% to 4% in loan interest rates for borrowers, restructuring repayment terms, and offering exemptions and reductions to alleviate financial burdens.
34 of loan interest; Keep the debt group unchanged; Reducing payment costs and lending money to pay severance pay for employees from the Bank for Social Policies
Vietnam's monetary policy shares similarities with the Bank of Japan's approach, as both maintain a loose monetary stance while reducing interest rates despite concerns over potential negative effects on bank profitability In contrast, the US Federal Reserve is tightening its monetary policy to combat rising inflation, which has surged in the US due to the recovery of socio-economic activities post-pandemic Consequently, inflation in Japan is rising slowly, highlighting the divergent economic responses between the two countries.
To avoid replicating the Bank of Japan's challenges, the Vietnamese Bank must seek alternative solutions before facing similar outcomes Currently, there are no concrete recommendations to address the issue, but adjusting monetary policy could be a significant step towards stabilizing the inflation rate.
Recent research indicates that the depreciation of the yen is primarily a reflection of the dollar's appreciation, with expectations that this trend will continue While a weaker yen has benefited many Japanese companies and their trading partners, further declines could be detrimental, failing to boost exports or tourism, and hindering job creation in a time when Japan requires more high-quality employment opportunities As the Federal Reserve accelerates interest rate hikes, Japan's economic recovery faces increased pressure from the widening gap between the yen and the dollar Although a depreciated yen may favor exporters, it risks dampening domestic demand as rising energy prices contribute to imported inflation, eroding the purchasing power of households and businesses This situation could lead to significant foreign exchange interventions by Japan to stabilize the currency Furthermore, this scenario serves as a cautionary tale for Vietnam and other nations to anticipate risks and address inflation-related challenges proactively.
1 Nam, T báo T chính V (n.d.) Đồng Yên giảm sâu trong lịch sử [online] Thời báo Tài chính Việt Nam
Available at: https://thoibaotaichinhvietnam.vn/dong-yen-giam-sau-trong-lich-su- 105851.html [Accessed 7 Jun 2022]
2 Tạp chí Thị trường Tài chính - Tiền tệ (n.d.) Chính sách tiền tệ và chính sách tài khoá của Việt Nam trước tác động của dịch COVID-19 [online]
Available at: https://thitruongtaichinhtiente.vn/chinh-sach-tien-te-va-chinh-sach-tai-khoa- cua-viet-nam-truoc-tac-dong-cua-dich-covid-19-38629.html [Accessed 7 Jun 2022] REFERENCES IN ENGLISH
1 Chen, J (2020) Exchange Rate Definition [online] Investopedia Available at: https://www.investopedia.com/terms/e/exchangerate.asp
2 Corporate Finance Institute (n.d.) Contractionary Monetary Policy - Definition, Tools, and Effects [online] Available at: https://corporatefinanceinstitute.com/resources/knowledge/economics/contractionary- monetary-policy/
3 CFI (2018) Expansionary Monetary Policy - Definition, Tools, and Effects [online] Corporate Finance Institute Available at: https://corporatefinanceinstitute.com/resources/knowledge/economics/expansionary- monetary-policy/
4 Japan Center for Economic Research (2022) What Does the Depreciation of the Yen Mean to the Economy? [online] Available at: https://www.jcer.or.jp/english/what- does-the-depreciation-of-the-yen-mean-to-the-economy
5 Kihara, L and Wada, T (2022) Analysis: Inflation prospects to influence BOJ’s dovish guidance more than yen Reuters [online] 20 Apr Available at: https://www.reuters.com/world/asia-pacific/inflation-prospects-influence-bojs-dovish- guidance-more-than-yen-2022-04-20/ [Accessed 7 Jun 2022]
6 Kohler, M., Manalo, J and Perera, D (n.d.) Exchange Rate Movements and Economic Activity [online] Available at: https://www.rba.gov.au/publications/bulletin/2014/mar/pdf/bu-0314-5.pdf
7 Macrotrends.net (2009) Dollar Yen Exchange Rate (USD JPY) - Historical Chart [online] Available at: https://www.macrotrends.net/2550/dollar-yen-exchange-rate- historical-chart
8 S, A (2018) Theories of Exchange Rate Determination | International Economics [online] Economics Discussion Available at: https://www.economicsdiscussion.net/foreign-exchange/theories-foreign- exchange/theories-of-exchange-rate-determination-international-economics/30637
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