Shadow forex d forexrebatesbrokerscount brokers forexbonusrebate (ShadowExchangeRate;SER) What is the forexdiscountbrokers exchange rate Shadow exchange rate is the exchange rate that can correctly reflect the true value of foreign exchange, that is, the shadow price of foreign exchange Shadow exchange rate concept was first proposed by economist Harburg in the 1960s, its initial definition is the social welfare value of the unit of foreign exchange (WelfareValue) Later in the literature, program evaluators usually define the shadow exchange rate as the economic value of a unit of foreign exchange (EconomicValue), distinguishing it from the financial value of a unit of foreign exchange (FinancialValue) cashback forex the market value of foreign exchange (MarketValue) The form of the shadow exchange rate release The shadow exchange rate release has two forms: (1) one is the direct release of the shadow exchange rate (2) the other is to link the shadow exchange rate with the national foreign exchange rate, the release of the shadow exchange rate conversion factor shadow exchange rate calculation shadow exchange rate calculation formula: shadow exchange rate = foreign exchange rate × shadow exchange rate conversion factor shadow exchange rate conversion factor: is the shadow exchange rate and the national foreign exchange rate ratio shadow exchange rate value for the project decision has an important impact shadow exchange rate according to the foreign trade goods ratio, weighted tariff rate, foreign trade deficit income For example, assuming that Chinas shadow exchange rate conversion factor is 1.08, then when the U.S. foreign exchange rate is $8.09, the shadow exchange rate of the U.S. dollar = the foreign exchange rate of the U.S. dollar × the shadow exchange rate conversion factor = 8.09 × 1.08 = 8.74 yuan / U.S. dollar significance of the shadow exchange rate in the project evaluation work What kind of exchange rate is appropriate for foreign currency-denominated investment goods and products? When there is a tariff or other form of distortion, the price per unit of U.S. dollar for foreign currency-denominated inputs is significantly different from the price per unit of U.S. dollar for externally-denominated outputs, and the nominal exchange rate alone obviously does not accurately reflect the value per unit of U.S. dollar in the project. In this case, the value of a unit of U.S. dollars for imports is 10 × (1 + 15%), or $11.5 in local currency, and the value of a unit of U.S. dollars for exports is 10 × (1 - 5%), or $9.5 in local currency. The nominal exchange rate of 10 local currency to l foreign currency is obviously not an accurate measure of the value of a unit of U.S. dollars in the item. In response to the differences between the value of a unit of foreign currency and the nominal exchange rate caused by various distortions such as tariffs and non-tariff barriers. Harburg proposes an accurate measure of the value of foreign exchange generated or used in the project: "the marginal value of a unit of the dollar to a representative consumer in a welfare sense". It is an important reference price for project evaluation, especially for the feasibility analysis and evaluation of state-sponsored projects. The shadow exchange rate is a key price factor in the accurate assessment of the social value of projects in both developed and developing countries in the OECD. Some people believe that developed countries use a floating exchange rate system, and the floating exchange rate is completely determined by the market, there is no distortion, therefore, developed countries do not need to calculate the shadow exchange rate This is actually a misunderstanding of the shadow exchange rate, from the theoretical point of view, as long as there are various tariffs or quotas and other non-tariff barriers, the nominal exchange rate and the shadow exchange rate will exist a certain gap whether developed or developing countries, all Shadow exchange rates are needed to accurately assess the social value of projects in developing countries because of the imperfect market construction, external trade environment and international competitiveness, market distortion is often relatively serious, the gap between the shadow and nominal exchange rates may be relatively large, the calculation of shadow exchange rates appears to be more important for developing countries. Due to the different starting points and research objectives, the exchange rate has almost become a conceptual system that contains many sub-concepts in the concept of exchange rate, including the nominal exchange rate (NominalExchangeRateOrOfficialExchangeRate), the external real exchange rate (ExternalRealExchangeRate), the internal real exchange rate (InternalRealExchangeRate), and the internal exchange rate (InternalRealExchangeRate). InternalRealExchangeRate, EquilibriumExchangeRate, exchange costs, black market exchange rate, shadow exchange rate (ShadowExchangeRate) and a series of sub-concepts, among which, external real exchange rate, internal real exchange rate, equilibrium exchange rate there are For example, the external real exchange rate includes the external real exchange rate measured from the perspective of expenditure and the external real exchange rate measured from the perspective of competitiveness, and the equilibrium exchange rate includes the FundamentalEquilibriumExchangeRate, BehaviorEquilibriumExchangeRate ( BehaviorEquilibriumExchangeRate), NaturalEquilibriumExchangeRate, DesiredEquilibriumExchangeRate, etc. All these sub-concepts of the exchange rate system are kept The shadow exchange rate is a very important exchange rate concept in the exchange rate concept system, which is related to the nominal exchange rate, equilibrium exchange rate, exchange cost and other concepts. The difference between the two needs to be discussed at two levels: first, if the nominal exchange rate set by the monetary authority is actively adjusted according to changes in economic fundamentals and there is no systematic deviation from the equilibrium exchange rate level (or the nominal exchange rate is sustainable), the shadow exchange rate is based on the nominal exchange rate minus the amount of exchange rate due to Various tariffs, non-tariff barriers or export incentives brought about by price distortions To give a simple example, assume that the current nominal exchange rate is close to the equilibrium exchange rate, the exchange rate is l dollars to l0 dollars of the local currency, there is only a 15% tariff on imports and exports, the current shadow exchange rate is the importer faces a unit dollar price of 10 × 1.15 = 11.5 yuan and the exporter faces a unit dollar price of 10 yuan The weighted average, (see Section 2 above for the specific weighted average approach), assuming weights of 0.5 for each party, is calculated as follows: Note that the difference between the shadow and nominal exchange rates here is entirely caused by the 15% tariff If the nominal exchange rate set by the monetary authorities is not actively adjusted to changes in economic fundamentals, the current level of the nominal exchange rate is inherently subject to certain macroeconomic distortions that A reasonable shadow exchange rate is one that is based on the equilibrium nominal exchange rate (rather than the nominal exchange rate) less the price distortions caused by various tariffs, non-tariff barriers or export incentives. The difference between the shadow exchange rate and the nominal exchange rate comes from the distortion of the nominal exchange rate to the equilibrium exchange rate on the one hand, and the distortion of the equilibrium exchange rate and the shadow exchange rate brought about by the tariff on the other hand The concept of equilibrium exchange rate was first introduced by Knox in 1945. In terms of economic welfare, the equilibrium exchange rate is the most efficient price level per unit of foreign currency in the sense of economic growth and economic stability The equilibrium exchange rate is a medium- to long-term concept that is determined by a set of economic fundamentals (e.g., terms of trade, labor productivity of the traded goods sector relative to foreign countries, openness, foreign prices, constant prices). degree, foreign prices, the ratio of trade balance to GNP in constant prices, the ratio of investment to gross domestic absorption level in constant prices, etc.) supported by a series of economic fundamentals, and in the medium to long term the nominal exchange rate is bound to converge to the equilibrium exchange rate If the nominal exchange rate and the equilibrium exchange rate are consistent with each other, the shadow price can be calculated by deducting the tax distortions in the import and export links on the basis of the nominal exchange rate, and the resulting If there is an imbalance between the nominal exchange rate and the equilibrium exchange rate, it is superior to use the equilibrium exchange rate instead of the nominal exchange rate as the basis for calculating the shadow exchange rate. Distortions in terms of exchange cost and shadow exchange rate The cost of exchange of exported goods is the total cost in RMB per dollar of net income from the export of goods, calculated as follows: cost of exchange of exported goods = total cost required ex-factory (RMB) / net income from export sales (USD) From the definition of the shadow exchange rate, if there are no price distortions in various domestic goods and services, the cost of exchange and the shadow exchange rate remain the same However, the If there are price distortions in the domestic market, there is a gap between the cost of exchange and the shadow price If domestic tax or other policies are more favorable to the production of traded goods, the total cost of exports is relatively underestimated, and the calculated cost of exchange is lower than the economic value of the unit of foreign exchange Conversely, domestic tax or other policies are more favorable to the production of non-traded goods, the cost of exchange is higher than the shadow price In practice, the cost of exchange For a simple example, suppose a country earns $100 billion in export revenue through exports and the cost is $800 billion in local currency. If domestic tax or other policies prefer to encourage the traded goods sector, and the cost of traded goods (including exports, imported substitutes and other products available for foreign trade) is actually distorted, and the real cost of exports is 10,000 local currency after removing distortions caused by domestic policy factors, then the real value of one unit of US dollar should be 10 local currency instead of the exchange cost of 8 local currency Note that the difference between the cost of exchange and the shadow price is that it only considers the average social value of a unit of foreign exchange exchanged at the export level, but not at the economy-wide level