Impact of macroeconomic variables on Exchange rate: an evidence from Pakistan.
Abstract
The purpose of this research is to provide the evidence on the relationship between Real Exchange Rate against US dollar and macroeconomic variables in Pakistan. To examine this relationship, the ordinary least square regression technique is used. The current balance is negatively significant at 10% level; the inflation and foreign direct investment is also negatively significant at 5%, 1% respectively, But the Gross Domestic Product per capita is positively significant at 5% level. The Trade openness shows no important relation with Real Exchange Rate. This study is helpful for international investor, and also to increase export for a country.
References
Adeniran, J., Yusuf, S., & Adeyemi, O. A. (2014). The impact of exchange rate fluctuation on the Nigerian economic growth: An empirical investigation. International Journal of Academic Research in Business and Social Sciences, 4(8), 224.
Azid, T., Jamil, M., & Kousar, A. (2005). Impact of exchange rate volatility on growth and economic performance: A case study of Pakistan, 1973–2003. The Pakistan Development Review, 44(4), pp. 749–775.
Bacchetta, P., & Van Wincoop, E. (2013). On the unstable relationship between exchange rates and macroeconomic fundamentals. Journal of International Economics, 91(1), 18-26.
Barkoulas, J. T., Baum, C. F., & Caglayan, M. (2002). Exchange rate effects on the volume and variability of trade flows. Journal of International Money and Finance, 21(4), 481-496.
Chinn, M. D., & Wei, S.-J. (2008). A faith-based initiative: does a flexible exchange rate regime really facilitate current account adjustment?
Ebiringa, O. T., & Anyaogu, N. (2014). Exchange rate, inflation and interest rates relationships: Autogressive distributive lag analysis. Journal of Economics and Development Studies, 2, 263-279.
Hakkio, C. S. (1982). Exchange rate determination and the demand for money. The Review of Economics and Statistics, 681-686.
Honohan, P., & Lane, P. R. (2004). Exchange rates and inflation under EMU: an update.
Jillani, S., & Asim, M. (2010). Exploring impact of macro economic variables on GDP of Pakistan. IBT Journal Of Business Studies (JBS), 6(2).
Mahmood, I., Ehsanullah, M., & Habib, A. (2011). Exchange rate volatility & macroeconomic variables in Pakistan. Business management dynamics, 1(2), 11.
Mordi, C. N. (2006). Challenges of exchange rate volatility in economic management in Nigeria.
Rehman, M. (2014). Analysis of Exchange Rate Fluctuations: A Study of PKR VS USD. Journal of Managerial Sciences, 8(1).
Shaheen, F. (2013). Fluctuations in exchange rate and its impact on macroeconomic performance of Pakistan. The Dialogue, 8(4), 410-418.
Zamir, M., Amin, A., Ullah, S., & Khan, S. U. (2017). Exchange Rate Volatility in Pakistan and Its Impact on Selected Macro Economic Variables (1980-2014). iBusiness, 9(4), 167-187.
