Economic Determinants of Rupee-Dollar Exchange Rates

Authors

  • Sadaf Amjad Balochistan University of Information Technology, Engineering & Management Sciences, Quetta, Pakistan

Abstract

The objective of this study is to examine the economic determinants of USD-PKR exchange rate. This study uses four independent variables (i.e., inflation rate, interest rate, GDP and money supply) and one dependent variable (i.e., USD-PKR exchange rate). We have used a dataset for the period 2008 to 2017. The data was retrieved from the official websites of the State Bank of Pakistan, the World Bank, and the Pakistan Bureau of Statistics. Several diagnostic tests were applied before multiple regression. The results suggest that the money supply and interest rate have a positive relationship with the USD-PKR exchange rate while we found an insignificant relationship between inflation rate and USD-PKR exchange rate. The main limitation of this study is that it uses data from Pakistan only. Future research may use cross-country data to examine the relationships between these variables.Keywords: Exchange rate, inflation rate, money supply, interest rate, GDP, Pakistan.

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Published

2020-07-11

Issue

Vol. 15 No. 1 (2020): Market Forces Research Journal Volume 15 No 1

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