Effect of Commodity Exchange on the Economy- Prospects and Challenges

Huda, Md Nazmul and Hossain, Sayed Mohammad Athar and Shaturaev, Jakhongir (2023): Effect of Commodity Exchange on the Economy- Prospects and Challenges. Published in: Portfolio , Vol. 1, No. 29 (28 March 2023): pp. 27-44.

Abstract

Commodity exchanges can play an important role in market development by increasing efficiency, reducing transaction costs, and providing price risk management tools. However, establishing and operating a successful commodity exchange in a developing country can be challenging. The key challenges include: small market size and lack of liquidity, weak infrastructure, lack of legal and regulatory support, lack of awareness and understanding of commodity exchanges among market participants, and government interventions that can distort market prices. Policy interventions that can be used to address these challenges and promote the development of successful commodity exchanges in developing countries include: providing financial support, developing the necessary infrastructure, creating a legal and regulatory framework, and raising awareness of commodity exchanges among market participants.

• Item Type: MPRA Paper
• Language: English
• Keywords: Commodity exchange; financial market; stock market; securities and exchange commission
• Subjects: K - Law and Economics > K0 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General > M00 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance

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