Tradeoffs from Hedging Oil Price Risk in Ecuador PDF Download
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Author: Sudhakar Satyanarayan
Publisher: World Bank Publications
ISBN:
Category : Ecuador
Languages : en
Pages : 23
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Book Description
Author: Sudhakar Satyanarayan
Publisher: World Bank Publications
ISBN:
Category : Ecuador
Languages : en
Pages : 23
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Book Description
Author: Eduardo Somensatto
Publisher:
ISBN:
Category :
Languages : en
Pages : 17
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Book Description
The benefits in risk-reduction from hedging Ecuadorian oil, and the opportunity costs of hedging.The oil sector is critical to Ecuador's economy, contributing about 17 percent to the country's GDP. Ecuador began exporting crude oil in 1972 and over the past two and a half decades oil has become the country's most important sector. It is controlled by the government through the public enterprise, PETROECUADOR, which serves as the holding company for all state-owned petroleum operations.Movements in oil prices are of major concern to the government, and forecasts of oil prices are built into the government budget. Ecuador's macroeconomic performance depends on the oil sector's performance; shocks to the sector have economywide repercussions.Satyanarayan and Somensatto investigate methods to reduce risk for the country's oil exports through hedging in futures markets. They find that hedging Ecuadorian oil has significant potential for risk reduction. After simulating ex-ante cross hedges for 1991-96, they find that in each case ex-ante hedging effectively reduces risk. They calculate the tradeoffs between return and risk from hedging and find that for a risk-minimizing short hedger, a 1-percent reduction in risk would cost a reduction in return of 0.65 percent.This paper - a product of the Country Operations Division, Country Department III, Latin America and the Caribbean - is part of a larger effort in the department to provide policy advice to member countries.
Author: Jacques Morisset
Publisher: World Bank Publications
ISBN:
Category : Commercial products
Languages : en
Pages : 36
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Book Description
Author: Jun'ichi GotÅ
Publisher: World Bank Publications
ISBN:
Category : Agriculture
Languages : en
Pages : 68
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Book Description
Author: Barbara Fakin
Publisher: World Bank Publications
ISBN:
Category : Ajuste estructural
Languages : en
Pages : 38
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Book Description
Author: William Easterly
Publisher: World Bank Publications
ISBN:
Category : Crecimiento economico
Languages : en
Pages : 40
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Book Description
Author: Salvatore Schiavo-Campo
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 94
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Author: Aymo Brunetti
Publisher: World Bank Publications
ISBN:
Category : Economic indicators
Languages : en
Pages : 54
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Author: Alain de Crombrugghe
Publisher: World Bank Publications
ISBN:
Category : Budget
Languages : en
Pages : 55
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Book Description
Author: Harry Huizinga
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 22
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Book Description
August 1997 One test of the efficacy of World Bank partial credit guarantees is whether they lower the interest rate and lengthen the effective maturity of the part of the credit not covered by the guarantee. Do they? Since 1994, the World Bank has provided partial credit guarantees to private financiers of several large infrastructure projects in developing countries. A major objective of the partial guarantee program is to leverage Bank resources so as to provide developing countries with better private credit terms. A real test of the efficacy of World Bank partial credit guarantees is whether they also lower the interest rate and lengthen the effective maturity of the part of the credit not covered by the World Bank guarantee. On the basis of deals closed so far, Huizinga finds no evidence that guarantees have affected nonguaranteed interest rates favorably, while the duration of the nonguaranteed credits remains relatively short. This paper-a product of the Development Research Group-is part of a larger effort in the group to evaluate the impact of World Bank guarantees.
