A Treasury Management Model for Predicting Liquidity Risk in Dynamic Emerging Market Energy Sectors

• Author(s): Wasiu Eyinade ; Onyinye Jacqueline Ezeilo ; Ibidapo Abiodun Ogundeji
• Paper ID: 1709457
• Page: 249-258
• Published Date: 12-09-2020
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 4 Issue 2 August-2020

Abstract

This paper proposes a comprehensive treasury management model designed to predict liquidity risk in the energy sectors of emerging markets, characterized by financial volatility and structural complexities. Traditional liquidity risk frameworks often fall short in dynamic environments marked by regulatory unpredictability, commodity price swings, and limited financial infrastructure. The model integrates core treasury variables such as short-term liabilities, cash conversion cycles, and sensitivity to macroeconomic and sector-specific indicators, including foreign exchange volatility and commodity price fluctuations. It incorporates adaptive feedback mechanisms that enable continuous recalibration and real-time liquidity forecasting. By aligning with the unique operational and financial constraints faced by emerging market energy firms, the model advances treasury risk literature and provides practical tools for treasury managers to maintain solvency, optimize liquidity reserves, and mitigate funding shocks. The study concludes by suggesting future enhancements through artificial intelligence integration and stress-testing under extreme market conditions, offering a robust framework for navigating liquidity challenges in volatile economic contexts.

Keywords

Treasury Management, Liquidity Risk, Emerging Markets, Energy Sector, Cash Flow Forecasting, Financial Volatility

Citations

IRE Journals:
Wasiu Eyinade , Onyinye Jacqueline Ezeilo , Ibidapo Abiodun Ogundeji "A Treasury Management Model for Predicting Liquidity Risk in Dynamic Emerging Market Energy Sectors" Iconic Research And Engineering Journals Volume 4 Issue 2 2020 Page 249-258

IEEE:
Wasiu Eyinade , Onyinye Jacqueline Ezeilo , Ibidapo Abiodun Ogundeji "A Treasury Management Model for Predicting Liquidity Risk in Dynamic Emerging Market Energy Sectors" Iconic Research And Engineering Journals, 4(2)