The Turning Tide: How Vulnerable are Asian Corporates?

The Turning Tide: How Vulnerable are Asian Corporates?
Author :
Publisher : International Monetary Fund
Total Pages : 47
Release :
ISBN-10 : 9781498314022
ISBN-13 : 1498314023
Rating : 4/5 (023 Downloads)

Book Synopsis The Turning Tide: How Vulnerable are Asian Corporates? by : Bo Jiang

Download or read book The Turning Tide: How Vulnerable are Asian Corporates? written by Bo Jiang and published by International Monetary Fund. This book was released on 2019-05-06 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a new firm-level dataset with comprehensive information on Asian firms’ FX liabilities, we show that Asia’s nonfinancial corporate sector is vulnerable to a tightening of global financial conditions. Higher global interest rates and exchange rate depreciation increase the probability of default of Asian firms. A 30 percent currency depreciation is associated with a two-notch downgrade in the corporate credit rating (e.g., from A to BBB+), resulting in 7 percent of Asian firms falling into bankruptcy. But the impact is nonlinear—as the firms’ FX liability increases, the balance sheet channel of exchange rate offsets, then dominates, the competitiveness channel. The balance sheet channel offsets the competitiveness channel when the share of U.S. dollar debt is between 10 and 20 percent. We also find that currency depreciation increases firm-level investment on average, but for firms with the share of FX liabilities above 20 percent, investment contracts with depreciation.


The Turning Tide: How Vulnerable are Asian Corporates? Related Books

The Turning Tide: How Vulnerable are Asian Corporates?
Language: en
Pages: 47
Authors: Bo Jiang
Categories: Business & Economics
Type: BOOK - Published: 2019-05-06 - Publisher: International Monetary Fund

GET EBOOK

Using a new firm-level dataset with comprehensive information on Asian firms’ FX liabilities, we show that Asia’s nonfinancial corporate sector is vulnerabl
Facing the Tides
Language: en
Pages: 76
Authors: Mr.Harald Finger
Categories: Business & Economics
Type: BOOK - Published: 2019-10-22 - Publisher: International Monetary Fund

GET EBOOK

This paper looks empirically at some economic effects of volatile exchange rates and financial conditions and examines policy responses for managing such volati
Financial Development, Exchange Rate Fluctuations and Debt Dollarization: A Firm-Level Evidence
Language: en
Pages: 42
Authors: Minsuk Kim
Categories: Business & Economics
Type: BOOK - Published: 2019-08-02 - Publisher: International Monetary Fund

GET EBOOK

This paper examines how financial development influences the debt dollarization of nonfinancial firms in a sample of emerging market economies (EMEs). The macro
SHOCKS AND CAPITAL FLOWS
Language: en
Pages: 2040
Authors: GASTON. SAHAY GELOS (RATNA.)
Categories:
Type: BOOK - Published: 2023 - Publisher: International Monetary Fund

GET EBOOK

Regional Economic Outlook, May 2009, Asia and Pacific
Language: en
Pages: 98
Authors: International Monetary Fund. Asia and Pacific Dept
Categories: Business & Economics
Type: BOOK - Published: 2009-05-05 - Publisher: International Monetary Fund

GET EBOOK

Asia has been hard hit by the global financial crisis. Despite strong fundamentals, its pervasive linkages to the rest of the world have exposed it to the colla