Home >> Working Paper
Trade-Finance Arbitrage, Commodity Prices Change and the Effect of Monetary Policy
Read        DownLoad
TitleTrade-Finance Arbitrage, Commodity Prices Change and the Effect of Monetary Policy  
AuthorZheng Zunxin, Wang Qi and Xu Xiaoguang  
OrganizationCollege of Economics, Shenzhen University,,。 
Key WordsThe Effect of Cost-of-carry; The Effect of Trade-finance Arbitrage; Commodity Prices Change; The Effect of Monetary Policy 
AbstractIn recent years, trade-finance arbitrage activities have been hyperactive with no systematic theoretical framework and effective countermeasures in place, in order to observe the commodity prices change and the effect of monetary policy from a new perspective, we try to take trade-finance arbitrage activities into consideration to establish the equilibrium framework of arbitrage storage based on the traditional theory of storage. And through the idea of effect demonstration, a new method is provided to diagnose the active level of trade-finance arbitrage activities. According to the empirical results, trade-finance arbitrage activities across borders are more active than those within; When domestic market interest rate rise above the equilibrium level, the interest spread is likely to be widen, so the effect of trade-finance arbitrage is magnified; The suppression effects of current depreciation of RMB and government regulation are very limited; If contractionary monetary policy is implemented, the effect of trade-finance arbitrage is likely to strengthen the undershooting effect of commodity market. 
Serial NumberWP968 
  • Institute of Economics, Chinese Academy of Social Sciences
  • Copyright Economic Research Journal
  • The uploaded articles by this website express the authors’ views, not necessarily the views of this website.
  • Perennial Legal Counsel: Lu Kang (Chong Guang Law Office)
  • ISSN 0577-9154 CN 11-1081/F Postal Distribution Code 2-25l (Domestic) M16 (Overseas)
  • ICP 10211437 (Beijng)
  • No.2,Yuetan Bei Xiaojie, Xicheng District, Beijing 100836, P. R. China
  • Phone/Fax: (+8610) 68034153