Volume 6

The study extends the theoretical framework proposed to decompose rating migration matrices from bond market price data. Method to decompose default probability term structures for and from interest rate term structures for different rating categories, is delineated and empirically evaluated. Emphasis is squarely on using ahistorical (non-historical) market data, and utilizing actual market perceptions regarding default probabilities. The method naturally allows a mapping and transitioning between interest rate term structures and default probability term structures. Mapping to and fro interest rate term structures and default probability term structures introduces an additional level of triangulation and evaluation. The study examines the corresponding interest rate term structures of the default probability term structures of a typical rating migration matrix, and the corresponding default probability term structures of a typical market interest rate term structure set. It is found that the default probability term structures decomposed from market interest rate term structures significantly differ from rating migration matrix based default probability term structures. This may point to differing views on default probability term structures.

This study aimed to examine the effect of inflation on the issue of exchange rate determination of the forward exchange rate on the exchange rate of RMB (Renminbi) to Rupiah. Inflation has been chosen as an independent variable because of its close relation to PPP (purchasing power parity) theory. Analyses in this research have used logistic analysis with time series data. The data that has been used include exchange rate data with the period 2007-2017 with a sample size of 132 data. The results of this study have shown that inflation is effective in determining the exchange rate.

The Zimbabwe Demographic Health Survey (ZDHS 2010-11) showed that only 6 percent of the population is covered by health insurance in Zimbabwe. This study investigated the feasibility, acceptability and sustainability of Community Based Health Insurance (CBHI) as an alternative to pooling risk and financing social protection in Zimbabwe. Willingness to Pay (WTP) for health insurance and socioeconomic data were collected through interviews with 121 household heads selected using a 2-stage sampling procedure on 14 villages in Musana and Domboshava rural areas, a population which is largely unemployed and reliant on subsistence agriculture. A CBHI scheme was established and followed up for 3 years documenting data on visits made, financial contributions from recruited households and their actual health expenditures. Findings indicate that CBHI is generally accepted as a means of health insurance in rural communities. The median willingness to pay for health insurance was $5.43 against monthly expenditures ranging of up to $180. The low WTP is attributable to low incomes as only 3.4 percent of the respondents relied on formal employment. Trust issues, adverse selection, moral hazard, and administration costs were challenges threatening sustainability of CBHI. A financial gap averaging 42% was generally on a downward trend and was closed by the end of the follow-up study as contributions were equivalent to medical expenses. We conclude that CBHI is feasible, has potential for sustainability and should be considered as a springboard for the planned Zimbabwean National Health Insurance.