Fintech advancements for financial resilience: Analysing exchange rates and digital currencies during oil and financial risk

Sahar Afshan, Ken Yien Leong, Arsalan Najmi, Ummara Razi, Bawani Lelchumanan and Calvin Wing Hoh Cheong

Resources Policy, 2024, vol. 88, issue C

Abstract: Given the rising technological revolution, the necessity to analyse the intricate interplay among Fintech, digital currencies, and exchange rates gains prominence, driven by the imperative of economic and financial sustainability. This urgency is accentuated by the need to navigate growing economic challenges and heightened financial strength requirements, particularly in the context of escalating oil price volatility, which amplifies financial market risks. In response, the current study examines the dynamic interactions between Fintech, digital currencies, exchange rates, oil price volatility, and financial risk spanning from 2011 to 2023, employing the most appropriate techniques are the Morlet Wavelet and time-frequency decomposition techniques, which enable this comprehensive study to investigate short-term and long-term associations between these variables. The findings of the study on the weekly data suggested that Fintech has a positive coherence with digital currency and exchange rate, which increases its potential to reshape the traditional financial market. Whereas the fintech relationship with oil price volatility and financial risk is negative, implying that fintech innovations and advancements have stabilised the effect of these risks. Digital currency and exchange rates have a phase relationship which affects international trade, cross-border remittances, and overall economic stability. In contrast, the nexus between digital currency and oil price volatility and financial risk is negative. The study also endorsed the mediating role of oil price volatility and financial risk for the interconnection between fintech digital currency and exchange rate. Owing to the rapid pace of fintech and currency restructuring, the current assessment aids in projecting forthcoming trends, prompting the adjustment of regulatory frameworks to align with the evolving market dynamics.

Keywords: Fintech; Digital currency; Exchange rate; Oil prices volatility; Financial risk; Morlet wavelet (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723011431
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011431

DOI: 10.1016/j.resourpol.2023.104432

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().