THE EXCHANGE RATE REGIME AND INTERNATIONAL TRADE: EVIDENCE FROM GHANA

The degree of fluctuation of a country’s currency in relation to other currencies is an important factor in determining her foreign trade position. The study employed both theoretical and empirical approaches to examine Ghana’s real exchange rate and the impact on her foreign trade. A time series data, spanning from 1991 to 2019 was analyzed in an attempt to establish the relationship between exchange rate and economic growth. It is argued in the study that exchange rate has impact on a country’s export volumes. A verification on the relationship between labour force and international trade was also conducted. The study was also extended to examining the impact of a country’s access to stable electric power on export volumes. Findings of the study revealed a statistically significant and inverse association existing between exchange rate and international trade. The study also found that, wide electricity coverage has statistically significant and direct effect on foreign trade, resulting from an increased production capacity due to the availability of electric power. The study however found no suggestive evidence to support the claim that, labour force has impact on her foreign trade. A test on granger causality found no causal linkage between the variables. KEYWORDS: Exchange rate, international trade, labour force, exports.

The Impact of Rand/Pula Exchange Rate Volatility on Botswana’s Economic Growth

International Journal of Accounting and Finance Studies ◽

10.22158/ijafs.v3n2p27 ◽

2020 ◽

Vol 3 (2) ◽

pp. p27

Author(s):

SEBEGO, J. ◽

TSHEKO, B. O. ◽

MOTLALENG, G. R.

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Time Series Data ◽

Labour Force ◽

Trade Openness ◽

Exchange Rate Volatility ◽

Series Data ◽

Method Of Moment ◽

Generalized Method Of Moment ◽

This paper undertakes an investigation of the impact of the Rand/Pula exchange rate volatility on Botswana’s economic growth. The paper is using annual time series data, from 1977 to 2018. The Generalized Method of Moment (GMM) is employed to evaluate the impact of the real exchange rate volatility on Botswana’s economic growth. The GARCH model results found the Pula/Rand exchange rate to be volatile. The Rand/Pula exchange rate volatility does not have an impact on Botswana’s economic growth. This finding mirrors those of Kaur et al. (2019) and Musyoki et al. (2012). They found negative but insignificant impact of exchange rate volatility on economic growth in Malaysia and Kenya, respectively. Our empirical findings suggest that Botswana’s economic growth is largely explained by trade openness and growth of labour force and not influenced by the Rand/Pula exchange rate volatility.

Impact of exchange rate and oil price on the yield of sovereign bond and sukuk: Evidence from Malaysian capital market

Journal of Emerging Economies and Islamic Research ◽

10.24191/jeeir.v5i4.8834 ◽

2017 ◽

Vol 5 (4) ◽

pp. 27

Author(s):

Huda Arshad ◽

Ruhaini Muda ◽

Ismah Osman

Keyword(s):

Exchange Rate ◽

Capital Market ◽

Time Series Data ◽

Oil Prices ◽

Oil Price ◽

Series Data ◽

Sovereign Bond ◽

Long Run ◽

Short Run ◽

This study analyses the impact of exchange rate and oil prices on the yield of sovereign bond and sukuk for Malaysian capital market. This study aims to ascertain the effect of weakening Malaysian Ringgit and declining of crude oil price on the fixed income investors in the emerging capital market. This study utilises daily time series data of Malaysian exchange rate, oil price and the yield of Malaysian sovereign bond and sukuk from year 2006 until 2015. The findings show that the weakening of exchange rate and oil prices contribute different impacts in the short and long run. In the short run, the exchange rate and oil prices does not have a direct relation with the yield of sovereign bond and sukuk. However, in the long run, the result reveals that there is a significant relationship between exchange rate and oil prices on the yield of sovereign bond and sukuk. It is evident that only a unidirectional causality relation is present between exchange rate and oil price towards selected yield of Malaysian sovereign bond and sukuk. This study provides numerical and empirical insights on issues relating to capital market that supports public authorities and private institutions on their decision and policymaking process.

Testing Structural Break in the Relationship Between Exchange Rate and Macroeconomic Variables

Vision The Journal of Business Perspective ◽

10.1177/0972262919850933 ◽

2019 ◽

Vol 23 (4) ◽

pp. 442-453 ◽

Cited By ~ 1

Author(s):

Saidia Jeelani ◽

Joity Tomar ◽

Tapas Das ◽

Seshanwita Das

Keyword(s):

Exchange Rate ◽

Structural Breaks ◽

Time Series Data ◽

Structural Break ◽

Series Data ◽

Ripple Effect ◽

Macroeconomic Factors ◽

Parameter Instability ◽

Macroeconomic Variables ◽

The article aims to study the relationship between those macroeconomic factors that the affect (INR/USD) exchange rate (ER). Time series data of 40 years on ER, GDP, inflation, interest rate (IR), FDI, money supply, trade balance (TB) and terms of trade (ToT) have been collected from the RBI website. The considered model has suggested that only inflation, TB and ToT have influenced the ER significantly during the study period. Other macroeconomic variables such as GDP, FDI and IR have not significantly influenced the ER during the study period. The model is robust and does not suffer from residual heteroscedasticity, autocorrelation and non-normality. Sometimes the relationship between ER and macroeconomic variables gets affected by major economic events. For example, the Southeast Asian crisis caused by currency depreciation in 1997 and sub-prime loan crisis of 2008 severely strained the national economies. Any global economic turmoil will affect different economic variables through ripple effect and this, in turn, will affect the ER of different economies differently. The article has also diagnosed whether there is any structural break or not in the model by applying Chow’s Breakpoint Test and have obtained multiple breaks between 2003 and 2009. The existence of structural breaks during 2003–2009 is explained by the fact that volume of crude oil imported by India is high and oil price rise led to a deficit in the TB alarmingly, which caused a structural break or parameter instability.

COINTEGRATING RELATION BETWEEN EXCHANGE RATE AND GOLD PRICE

International Journal of Research -GRANTHAALAYAH ◽

10.29121/granthaalayah.v5.i10.2017.2303 ◽

2017 ◽

Vol 5 (10) ◽

pp. 263-269

Author(s):

Ranjusha ◽

Devasia ◽

Nandakumar

Keyword(s):

Exchange Rate ◽

Time Series Data ◽

Unit Root Test ◽

Gold Price ◽

Series Data ◽

Annual Data ◽

Causality Test ◽

Long Run ◽

Integration Test ◽

The very purpose of this paper is to analyse the relationship between gold price and Rupee – Dollar exchange rate in India. The study utilises the annual data of exchange Rate (ER) and Gold Price (GP) from 1970 to 2015 to determine the relationship. Different econometric tools like Unit root test, Johansen co integration test, Vector error correction model, Granger causality test are used for detecting the long run relation, if any between the mentioned variables. The result shows that there exists a long run cointegrating relation between the variables. That is we can stabilise the Gold Price movement by controlling the exchange rate fluctuations. Likewise it also shows that Exchange rate doesn’t Granger cause to Gold price and vice versa. It means that the time series data of one vasriable cannot be used to predict another.

THE IMPACT OF EXCHANGE RATE VOLATILITY ON ECONOMIC GROWTH IN NIGERIA: A DYNAMIC ECONOMETRIC APPROACH

African Journal of Business and Economic Development ◽

10.46654/ajbed.1533 ◽

2021 ◽

pp. 16-40

Author(s):

Comfort Akinwolere Bukola ◽

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Time Series Data ◽

Negative Impact ◽

Positive Impact ◽

Exchange Rate Volatility ◽

Series Data ◽

Balance Of Trade ◽

Econometric Approach ◽

This study examined the impact of exchange rate volatility on economic growth in Nigeria. The study covers the period of 1986 to 2019. Using time series data, the methodology adopted is the Vector Error Correction Mechanism to explore the impact of exchange rate volatility on the selected macroeconomic variables. The result indicated that exchange rate volatility has a significant impact on economic growth, specifically it has a positive impact on inflation, unemployment and balance of trade. On the other hand it has a negative impact on economic growth and investment. The recommendations made include; that relevant authorities should try to avoid systematic currency devaluations in order to maintain exchange rate volatility at a rate that allows adjustment of the balance of payments.

Analysis of Effect Macro Variable on International Trade of Indonesia

Business and Economic Research ◽

10.5296/ber.v6i2.10053 ◽

2016 ◽

Vol 6 (2) ◽

pp. 228

Author(s):

Evania Rahma Octavia ◽

Dwi Wulandari

Keyword(s):

International Trade ◽

Exchange Rate ◽

Interest Rates ◽

Money Supply ◽

Price Index ◽

Time Series Data ◽

Consumer Price Index ◽

Series Data ◽

The Exchange Rate ◽

Macro Variables

This study aims to determine the effect of macro variables which include Indonesia's real gross domestic income, money supply, consumer price index and interest rates on international trade mediated by the exchange rate of rupiah against the dollar. This type of research is descriptive research with quantitative approach. Determination of the sample based on quarterly time series data 2010-2014. This study uses path analysis. The results showed domestic gross product, the money supply, and interest rates together have a significant effect on the exchange rate but the consumer price index do not have significant effect on the exchange rate. The results also show that the exchange rate has no significant effect on imports and exports.

IMPACT OF TRADE ON ECONOMIC GROWTH OF PAKISTAN: AN ARDL TO CO-INTEGRATION APPROACH

Journal of Social Sciences and Humanities ◽

10.46568/jssh.v55i2.80 ◽

2016 ◽

Vol 55 (2) ◽

pp. 47-58

Author(s):

Nooreen Mujahid ◽

Azeema Begum ◽

Muhammad Noman

Keyword(s):

Economic Growth ◽

Time Series ◽

Exchange Rate ◽

Time Series Data ◽

Policy Option ◽

Stationary Time Series ◽

Series Data ◽

Long Run ◽

Import And Export ◽

This paper explores the relationship between export growth and economic growth in the case of Pakistan by employing time series data for the period 1971- 2013. This study has incorporated variables like GDP (Gross Domestic Product) exports, imports and Foreign Direct Investment (FDI). We have applied ARDL to co-integration and Error Correction Model (ECM). The study provides the evidence of stationary time series variables, the existence of the long - run relationship between them, and the result of ECM revealed short rum equilibrium adjustment. Pakistan has many options for enhancing the export of the country. There is a dire need to minimize trade barriers and restrictions such as import and export quotas. Government of Pakistan had introduced Structural Reforms for liberalization, privatization and de-regulation which will actually shifted the trend of trade at a significant level in the end of 1980s. Low levels of interest rate can help exportable industries in which investments are needed to promote and enhance the exports. Stable exchange rate is the first and the best policy option for increasing the export and managing the imports. There is a cause and effect relationship between exchange rate and FDI. Pakistan has to immediately find the policies and processes that support logistics and facilitates trade.

Impact of Macro-Economic Variable on Pakistan Stock Exchange KSE-100 Index

The Journal of Management Theory and Practice (JMTP) ◽

10.37231/jmtp.2020.2.3.171 ◽

2021 ◽

Vol 2 (3) ◽

pp. 17-23

Author(s):

Muhammad Faisal Hassan ◽

Hashim Bin Jusoh ◽

Sajjad Khan ◽

Fahad Ali Khan ◽

Muhammad Naseem ◽

...

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Time Series Data ◽

Positive Impact ◽

Stock Exchange ◽

Ordinary Least Squares ◽

Series Data ◽

Short Run ◽

The Impact ◽

Adf Test

The researcher investigates the Impact of inflation, exchange rate and interest rate on Pakistan stock Exchange performance KSE-100 index by using monthly time series data which covers the period of 2013 to 2020. The econometrics techniques which are employed includes ADF test, Ordinary Least squares regression Model, testing for Multi-collinearity, Residual analysis serial correlation, testing for co-integration, Error correction model (ECM), variance decomposition (VAR) and Pair wise granger causality test. The results indicate that there is positive impact of exchange rate on PSX 100 index and the impact of inflation and interest rate is fond negative but inflation have insignificant relationship with PSX 100 index and the other two relationships are found significant. From the ECM result it is found that in short run 20% of the variation in dependent variable is due to inflation, exchange rate and interest rate and 80% variation is unexplained in short run. Form the results of VAR test it is concluded that exchange rate 1.67, inflation 14.25%, and interest rate 3.90% variation cause in PSX 100 index performance due to these three independent variables.

Trade Openness and Economic Growth in Indonesia

Wiga Jurnal Penelitian Ilmu Ekonomi ◽

10.30741/wiga.v10i2.599 ◽

2020 ◽

Vol 10 (2) ◽

pp. 163-170

Author(s):

Khoirul Ifa ◽

Moh. Yahdi

Keyword(s):

Economic Growth ◽

International Trade ◽

Time Series Data ◽

Trade Openness ◽

Generalized Method Of Moments ◽

Series Data ◽

Test Results ◽

Rapid Economic Growth ◽

Economic growth and international trade are related to one another. International trade stimulates long-term economic growth. The more trade activities in a country, the more rapid economic growth; this trade is a key component of development in a country, its contribution is felt with the increasing economic growth in several countries. The purpose of this study looks at the impact of trade openness on economic growth in Indonesia in 1986-2017. This research is a quantitative study using time series data from 1986-2017, research data obtained from the world bank, data analysis techniques using the GMM method to see the impact of trade openness on economic growth. The test results using the Generalized Method of Moments analysis method show that all variables significantly influence the dynamics of economic growth in Indonesia. This result is proven by the t-statistic probability value, which shows a smaller value compared to the t-table value. Then the value also has a probability of less than α. It can be concluded that the variables of trade, FDI, inflation, and the number of workers have a significant effect on economic growth in Indonesia.

The Impact of Foreign Aid on Economic Growth in Palestine: An Empirical Evidence

Asian Journal of Economics Business and Accounting ◽

10.9734/ajeba/2021/v21i530384 ◽

2021 ◽

pp. 99-114

Author(s):

Nemer Badwan ◽

Mohammed Atta

Keyword(s):

Economic Growth ◽

Foreign Aid ◽

Labour Force ◽

High Rate ◽

Series Data ◽

Special Focus ◽

Chow Test ◽

Palestinian Economy ◽

The Impact ◽

This study examines the Impact of Foreign Aid on Economic Growth in Palestine by considering time series data of the last twenty years from (2000-2019). Foreign Aid's Impact on the Palestinian Economy explored with the Gross Domestic Product (GDP) as the dependent variable against few selected independent variables such as Foreign Aid, Remittance, Investment, Labour Force and Lagged (GDP). This study used the Partial Adjustment Model to analyze the Impact of Foreign Aid on Economic Growth in Palestine and also applied the (Chow Test) to examine whether there was a Structural Breakthrough in the Palestinian Economy. The results indicate that Foreign Aid has a positive relationship with (GDP). However, the relationship is not significant since the higher volume of Foreign Aid used in Humanitarian and Social Welfare rather than Production Activities in the real sectors. (Chow Test) shows that the relationship between Foreign Aid (GDP) has not witnessed a Structural Breakthrough in the Palestinian Economy over the past twenty years. In light of these empirical results, we suggest that Government Policy-Makers and Decision-Makers allocate this Foreign Aid to Productive Sectors and Human Capital formation (HC) activities with a special focus on capital expenditures to achieve a high rate of the country's Economic Growth and Development and to meet the periodic plan and Long-Term Development goals.