International Journal of Monetary Economics and Finance (10 papers in press)

Regular Issues

• Factors influencing FinTech adoption among Malaysian consumers: the moderating role of FinTech literacy  
  by Mohamad Fazli Sabri, Siong Hook Law, Chong Kok Fei, Anthony Ang Sang Nang, Husniyah Abdul Rahim, Mervin Anthony 
  Abstract: This study explores the factors influencing FinTech adoption among various demographic groups in Malaysia, including public and private sector workers, rural residents, and youths. It also examines the moderating role of FinTech literacy using an integrated framework based on systems theory and the unified theory of acceptance and use of technology (UTAUT). Employing a quantitative approach with survey data and structural equation modelling, the findings show that while FinTech literacy improves awareness and access, it may also increase reliance on traditional banking due to security concerns, regulatory uncertainties, and a preference for personalised services. The study reveals a non-linear relationship between financial literacy and FinTech adoption, challenging traditional assumptions about digital finance behaviour. It offers policy recommendations to enhance consumer protection and develop FinTech solutions. The research highlights the need for building digital trust, strengthening security features, and promoting hybrid financial models that merge traditional and digital financial services.
  Keywords: financial capability; FinTech; investment; literacy; risk; social influence.
  DOI: 10.1504/IJMEF.2025.10072690
   
  
• Distributional effects of monetary policy on wealth inequality in developing Asia  
  by Warawut Ruankham, Yuthana Sethapramote 
  Abstract: Building upon research primarily conducted in more advanced economies, this study broadens the investigation of the distributional effects of monetary policy and wealth inequality in developing Asia, with a specific focus on long-term cointegration between monetary policy and inequality. Utilising inequality data from the World Inequality Database during 20002021, we provide a comprehensive examination of the distributional effects of monetary policy on wealth inequality in nine developing countries in Asia who adopted inflation targeting monetary policy framework. Employing the Panel Vector Auto Regressive and the Auto Regressive Distributed Lag models, our findings reveal that expansionary monetary policy, characterised by lower interest rates and higher inflation, exacerbates long-term disparities in personal wealth. These results underscore the importance of central banks addressing the distributional consequences of their policies and incorporating inequality considerations into their long-term monetary objectives.
  Keywords: monetary policy; distributional effect; wealth inequality; time series analysis; developing Asia; panel VAR.
  DOI: 10.1504/IJMEF.2025.10072733
   
  
• The asymmetric relationship between monetary policy and the institutional investors march into cryptocurrencies  
  by Youcef Maouchi 
  Abstract: Using monthly data from April 2017 to June 2023, this study explores the factors associated with the rising institutional investments in cryptocurrencies, focusing on US monetary policy. We employ nonlinear autoregressive distributed lag (NARDL) and multiple threshold nonlinear ARDL (MT-NARDL) models to investigate the relationship between institutional crypto assets under management (AuM), the US Shadow Federal Funds Rate, Bitcoin price, S&P 500 index, and VIX. The results reveal a long run asymmetrical relationship: institutional Crypto AuM increase with decreasing rates but remain stable during periods of monetary tightening. Moreover, institutional exposure to cryptocurrencies shows long-term growth, though short-term market volatility reduces exposure. Interestingly, Bitcoins price seems to play a minimal role in these decisions. Our findings highlight the need for robust risk management by portfolio managers and suggest that policymakers consider the institutional capital flows into cryptocurrencies, given the potential implications for financial stability.
  Keywords: cryptocurrencies; institutional investors; USA monetary policy; shadow federal funds rate; asymmetric effects; risk-taking behaviour; NARDL; nonlinear autoregressive distributed lag; MT-NARDL; multiple threshold nonlinear ARDL.
  DOI: 10.1504/IJMEF.2025.10072849
   
  
• Does government spending really contribute to development? Evidence from Indonesia  
  by Sutaryo Sutaryo, Taufiq Arifin, Muhtar Muhtar, Ekwanto Ekwanto 
  Abstract: The implementation of decentralisation in Indonesia still invites public concern about local development, especially in realising the outcomes of government spending, that marks the urgency for a comprehensive study in this field. This study aims to comprehensively investigate the impact of government spending on development outcomes. Our study utilises secondary data from the authorised government institutions in Indonesia during 2015-2021 fiscal period, analysed with multiple regression analysis. We report that the development across Indonesia still experiences significant issues that requires urgent improvement. Overall, we find that government spending exhibits positive effect on development. Based on our findings, we suggest the government to improve the quality of the spending so that the spending realisation can be translated into the desired development outcomes to push the development towards a developed country. It is important to keep improving the management of the spending from the budget planning, realisation, until accountability evaluation.
  Keywords: Indonesia; decentralisation; government spending; development.
  DOI: 10.1504/IJMEF.2025.10072950
   
  
• Determining the threshold of the exchange rate instability for South Africa  
  by Simiso Msomi, Paul-Francois Muzindutsi 
  Abstract: Despite extensive literature, understanding exchange rate dynamics remains a challenging subject in the macroeconomics literature. For instance, the South African rand against the USA dollar has constantly experienced depreciating exchange rates since the 1960s. In the early 2000s, a rapid exchange rate depreciation led to the formation of the Myburgh Commission to investigate the causes of the exchange rate depreciation. However, the commission failed to point out the causes of the unexpected movement of the exchange rate. This study uses the SETAR model to determine the threshold value at which the exchange rate movement can be considered as exhibiting unusual behaviour. Thus, if the exchange rate movement exceeds the particular threshold value, then it is associated with a higher risk of exchange rate instability. The study established that when the exchange rate depreciates by more than 1.905% points, there is a higher risk of instability for the rand. Furthermore, the study finds that the South African exchange rate is currently in an unstable state.
  Keywords: exchange rates; instability; depreciation; appreciation; South Africa.
  DOI: 10.1504/IJMEF.2025.10073052
   
  
• A correspondence analysis on dynamics of local gold prices among major consumer economies during the pre-covid period and the pandemic period  
  by S. Sreejith, Hareesh N. Ramanathan 
  Abstract: The largest consumers of physical gold are China and India. Consumer attitudes towards gold in these emerging markets for consumption and investment are linked to their culture. Prices of gold in Indian and Chinese local markets mainly differ from international markets, either at a premium or at a discount price. The recent economic slowdown during the outbreak of COVID-19 also affected investors' investment preferences, especially towards safe-haven investments. Social restrictions, economic slowdown, and high gold prices have contributed to the same. The premium or discount to gold prices in the local market also gives financial leverage. The study compares the pricing strategies adopted by the largest consumer markets of gold during the pre-COVID-19 period and the COVID-19 pandemic period. India followed discount prices in both periods. China regularly followed premium costs, and a radical shift occurred during the pandemic. China shifted to discount prices during the COVID-19 period.
  Keywords: gold price; premium gold price; discount gold price; pandemic; COVID-19; correspondence analysis.
  DOI: 10.1504/IJMEF.2024.10059847
   
  
• Dynamic behaviour of Islamic banking financing in the real sector  
  by Faizul Mubarok, M. Nur Rianto Al Arif, Abdul Hamid 
  Abstract: One of the activities of Islamic banking is channelling financing to the real sector, comprising different characteristics, therefore appropriate management of the distribution process is needed. The purpose of this study is to analyse the effect of real sector financing on non-performing Islamic banking in the short and long terms and analyses its response in facing real sector financing shocks. This study uses a vector error correction model (VECM) with data collected monthly from Islamic commercial banks and business units from 2007 to 2020. The results showed no effect in the short term, with a significant effect in the long term on the industrial sector. Islamic banking stabilised the fastest when it responded to the agricultural sector financing shock. Furthermore, the transportation, warehousing, and communication sectors dominate the non-performing financing of Islamic banking, therefore a reserve fund is needed to create a portfolio and a priority scale.
  Keywords: financing; non-performing financing; real sector; Islamic bank; Islamic business units; distribution process.
  DOI: 10.1504/IJMEF.2024.10057738
   
  
• The impact of ownership concentration on bank stability: evidence from Vietnamese commercial bank  
  by Le Ha Diem Chi, Pham Hai Nam 
  Abstract: The paper uses data from 27 Vietnamese commercial banks from 2011 to 2021 to examine the impact of concentrated ownership on bank stability. In the research model, in addition to the ownership concentration variable, represented by the largest shareholder rate, the control variables include the bank-specific variables, the macroeconomic variables, and the variables that describe the quality of regulation and supervision by the State. The dependent variables use credit risk, and the Z-score represent calculated based on return on assets (ROA) and return on equity (ROE). By the system generalised method of moments (SGMM) estimation method, the research results show that highly concentrated ownership positively impacts bank stability. The study's findings highlight the role of ownership concentration, as an effective governance mechanism, in increasing supervision and the discipline of administrators to avoid excessive risk-taking and maintain banking stability.
  Keywords: ownership concentration; bank stability; Z-score; credit risk; bank-specific; risk-taking.
  DOI: 10.1504/IJMEF.2025.10070302
   
  
• Do central bank governors' characteristics matter for sovereign credit ratings? Evidence from emerging markets  
  by Rim Oueghlissi 
  Abstract: We examine whether a country's central bank governor's characteristics matter for its sovereign credit ratings. Using a panel regression model over a dataset of 20 emerging economies from 2000 to 2019, we show that central bank governor's characteristics could play a crucial role in assessing sovereign ratings. In particular, we find that when the central bank governor is old, there is a positive effect on sovereign credit ratings, and the same is true for tenure. When considering academic and professional background, we show that being specialised in the area of finance and having previous experiences in a bank, in a ministry or in a public institution contribute to attaining higher sovereign credit ratings. The results are economically relevant in the sense that they could matter to both investors and national policy makers.
  Keywords: sovereign credit ratings; central bank governor's characteristics; emerging market; panel data analysis; fixed effects model; low and lower-middle-income economies; upper-middle-income economies; global financial crisis.
  DOI: 10.1504/IJMEF.2025.10072570
   
  
• The good, the bad and the ugly: A policy debate on the political budget cycle in India with an ARDL model  
  by Prashant Ishvarlal Vadikar 
  Abstract: Fiscal tools can be used to signal voters mainly spending by the incumbents; this study attempts to verify empirically the same in the Indian general election during 1980-1981 to 2020-2021. The study has used the autoregressive distributed lag model to find evidence of the presence of a political budget cycle (PBC). The study assessed the stationarity of the series, selected the lag-length criteria, and even performed the diagnostic test to verify the credibility of the model. There is clear evidence of the presence of the electoral cycle in the pre-election budget, and the outcome seems to be aligned with past empirical studies. The incumbent influences the capital expenditure for the long run and revenue expenditure for the short run before the election year. The Fiscal policy has reduced non-development expenditure in long run; otherwise, the fiscal tools remained insignificant. The study suggests encouraging voters' awareness to enrich their voting decisions.
  Keywords: public finance; fiscal tools; PBC; political budget cycle; government policy.
  DOI: 10.1504/IJMEF.2025.10072504