scholarly journals Monetary Policy vs. Foreign Exchange Rate: A Statistical Analysis

2011 ◽  
Vol 5 (11) ◽  
Author(s):  
Tyler T. Yu ◽  
Miranda M. Zhang
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Money Supply ◽  
Foreign Exchange ◽  
Hypothesis Test ◽  
Time Lag ◽  
Correlation Coefficients ◽  
Foreign Exchange Rate ◽  
Exchange Rate Movements ◽  
The Impact

The purpose of this paper is to examine the economic impact of the Feds rate cuts on foreign exchange movements. Using secondary data, the paper estimates the lagged effects of the changes in money supply due to the rate cuts on the foreign exchange rates between the US dollar and the Japanese Yen ($/), British Pounds ($/), and the euro ($/), respectively. Since the impact of monetary policy tends to have a time lag, as suggested by Hall and Taylor, the study segments the measurements in six months intervals (6 months form the cut, 12 months from the cut, 18 months from the cut and 24 months from the cut). The relationship between the changes in money supply and potential impact on foreign exchange rate movements will be investigated using the Pearson Product-Moment Correlation coefficients (PPMCC) as well as Spearmans Rank Correlation coefficients (SRCC, the nonparametric alternative to the PPMCC). Then, a hypothesis test will be conducted to determine whether the correlation between the Federal Reserves stimulating monetary policy and foreign exchange rate movements is significant.

scholarly journals EFEK KETERBUKAAN PERDAGANGAN PADA VOLATILITAS NILAI TUKAR

2019 ◽  
Vol 10 (1) ◽  
pp. 38-45
Author(s):  
Wayrohi Meilvidiri ◽  
Syahruddin Syahruddin ◽  
Romualdus Turu Putra Maro Djanggo
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Normality Test ◽  
Lm Test ◽  
Exchange Rate Movements ◽  
Negative Effect ◽  
The Exchange Rate ◽  
The Impact

This study uses the q to q dataset for the period 2011-2018, to examine the effect of trade openness on the exchange rate, on the other hand variable money supply, inflation and GDP growth and high-low exchange rates (dummy) will smooth the impact of shocks to the exchange rate . Using the OLS econometric estimator to see the effect of variables and the ARCH method to measure the uncertainty of exchange rate movements. Estimation results show that trade openness (open trade index); the money supply (money supply) and the high-low peak value of the exchange rate have a significant positive effect while the growth variable has a significant negative effect on exchange rate volatility. The LM test simultaneously found ARCH in residual data in lag 1 and lag 2. The normality test found abnormal residuals, while the residual heteroscedasticity test showed no ARCH problems in the last residuals.

scholarly journals Impact of Foreign Exchange Rate and Inflation Rate on the Economic Growth of India

2019 ◽  
Vol 8 (4) ◽  
pp. 4333-4335
Keyword(s):  
Growth Rate ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Inflation Rate ◽  
Linear Regression Analysis ◽  
Foreign Exchange Rate ◽  
Gdp Growth ◽  
Economic Progress ◽  
Gdp Growth Rate ◽  
The Impact

This paper tries to investigate the impact of foreign exchange rate and inflation rate on the economic progress of India. In this study the economic progress has been measured by annual GDP ( Gross Domestic Product ) growth in India. Correlation analysis and multiple regression model have been designed to explore the relationship among the mentioned three variables. The annual GDP growth of India has been considered as the dependent variable and the other two macroeconomic variables ( Foreign exchange rate and inflation rate ) have been considered as the independent variables. Secondary sources of data have been gathered to arrive at a logical conclusion. The results show a positive correlation between GDP growth rate and the foreign exchange rate and a negative correlation between the GDP growth rate and the inflation rate. Results from the linear regression analysis show that inflation rate has a strong influence or impact on the GDP growth rate than the foreign exchange rate. It is expected that the present study will help the policy makers and the researchers to understand the impact of foreign exchange rate and inflation rate on the GDP growth in India

scholarly journals Imperative of Exchange Rates Policy and Industrial Growth in Nigeria: A Time Series Analysis

2017 ◽  
Vol 10 (2) ◽  
pp. 187-198 ◽  
Author(s):  
Olatunji A. Shobande
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Money Supply ◽  
Exchange Rate Policy ◽  
Industrial Growth ◽  
Vector Error Correction ◽  
Tax Incentive ◽  
Long Run ◽  
Speed Up ◽  
The Impact

Abstract This paper looks at the impact of foreign exchange rate policies on industrial growth in Nigeria between 1981 and 2016. The study employed the Vector Error Correction Model (VECM) techniques, following the results of Johansen Cointegration techniques that shows the existence of long run relationship among the variables considered. While, VECM estimates showed that money supply (monetary policy) impacted positively effects, evidence on, TAX (fiscal policy) impacted negative on industrial growth. Besides, the Exchange rate and Inflation impacted negatively on industrial growth., suggesting that the issue of stability remained a challenge unresolved by the Apex bank. The emanating policy antidotes are that there is urgent need to use proactive monetary policy through money supply to speed up the rate of industrial growth on one hand, while providing tax incentive to various industrial good that can further have enhanced the contribution of the sector to industrial growth on the other. In all, the need to align the objective of exchange rate policy with broader macroeconomic goals is necessary for effective policy transmission mechanism to speed up the rate of industrial progress in the country.

IMPACT OF FOREIGN TRADE ON ECONOMIC GROWTH IN NIGERIA

2021 ◽  
Vol 9 (1) ◽  
pp. 20-35
Author(s):  
Esiaka Chuka ◽  
◽  
Uwaleke Uche ◽  
Nwala Nneka ◽  
◽  
...  
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Foreign Trade ◽  
Foreign Exchange ◽  
Secondary Data ◽  
Foreign Exchange Rate ◽  
Distributed Lag ◽  
Oil Revenue ◽  
Ex Post ◽  
The Impact

This study investigated the impact of foreign trade on the economic growth of Nigeria for the period 1981–2018. Economists hold two contrasting opinions on the effect of foreign trade on a nation’s economy. While the positive-sum game school of thought holds the view that, when nations engage in foreign trade, there are bound to be mutual gains as each country’s utility is expanded, the negative-sum game school of thought holds the view that trade relations amongst nations of the world benefit one economy at the expense of the other. This study was embarked upon to ascertain which of these two conflicting opinions applies to Nigeria. Accordingly, the objective of the study was to determine the impact of foreign trade proxy by oil revenue, non-oil revenue, and foreign exchange rate on Nigeria’s economic growth proxy by gross domestic product growth rate. The study adopted the ex post facto research design and secondary data were obtained from the Central Bank of Nigeria Statistical Bulletin. The study employed the Autoregressive Distributed Lag Model to evaluate the effect of foreign trade on economic growth in Nigeria. Findings suggest that oil revenue, non-oil revenue, and foreign exchange rate have a significant impact on economic growth in Nigeria. The study recommended that Nigeria’s oil revenue be heavily invested in non-oil revenue-earning productive sectors such as agriculture and mining to create the desired multiplier effect on the economy.

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