Empirical Relationship of Exchange Rate with Inflation, International Trade and Gross Domestic Product (GDP) in Pakistan’s Economy

In the modern world, the exchange rate plays an important role in measuring the strength of country’s economy in global economic conditions. An exchange rate is an important tool for controlling various macro-economic variables, and it is itself affected by different macro-economic variables. Pakistan is a developing country of the world and its unstable economy faces high variability in the exchange rate or devaluation of the domestic currency. Therefore, this study investigates the relationship of an exchange rate with selected macro-economic variables (i.e. import, GDP, Inflation & export), with a special focus on Pakistan’s economy. It also aims at finding out the degree of strength at which selected independent variables to leave a significant impact on the exchange rate in the economy of Pakistan (i.e. during the period of 1992 to 2017). For this secondary database study, data extracted from official website of World Bank, State Bank of Pakistan and Economic Surveys of Pakistan. Multiple regression models were used to measure the empirical impact of selected independent variables on exchange rate. Findings show that the Import and Gross Domestic Product (GDP) have a significant negative impact on exchange rate whereas, export and inflation have a significant positive impact on the exchange rate in the economy of Pakistan. The study recommends that the Government of Pakistan should adapt to make its exchange rate policy more effective through high production, more export with a reduction of import and price stability.

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Analysis of The Effect of Gross Domestic Product, Exchange Rate, and Inflation on Balance of Payments in Indonesia

Advances in Social Sciences Research Journal ◽

10.14738/assrj.610.7277 ◽

2019 ◽

Vol 6 (10) ◽

pp. 361-374

Author(s):

Muammar Rinaldi ◽

Shinta Arida Hutagalung ◽

Muhammad Fitri Rahmadana

Keyword(s):

Exchange Rate ◽

Gross Domestic Product ◽

Error Correction ◽

Balance Of Payments ◽

Domestic Product ◽

Short Term ◽

Independent Variables ◽

Distributed Lag ◽

The Exchange Rate

This study aims to analyze the effect of the short and long term gross domestic product, exchange rate, and inflation on Indonesia's balance of payments. The data used in this study are secondary data which is obtained indirectly with the period of 1995 to 2015. Data sources were obtained from Bank Indonesia and the Central Bureau of Statistics. The data collection method used in this study with the indirect method is documentation through recording or copying data from Bank Indonesia and the Central Bureau of Statistics. The analysis model used is Error Correction Mechanism (ECM). The results of this study indicate that the regression model of the Autoregressive Distributed Lag Model (ARDL) for the long term and Error Correction Model (ECM) regarding the effect of independent variables such as Interest Rates, Gross Domestic Product and Inflation Against the Dependent dependent variable in Indonesia, then it can some conclusions are presented, namely from several independent variables that are tried and included in the savings equation in Indonesia using the Autoregressive Distributed Lag Model (ARDL) for the long term and Error Correction Model (ECM) for the short term, namely the gross domestic product variable, the inflation rate, and exchange rate. In the long run there are 2 (two) significant variables, namely gross domestic product and the exchange rate. While inflation is not significant. For the short term, there is 1 (one) significant variable, namely the exchange rate. Thus, only exchange rate variables are significant in both the short and long term. With only 1 (one) significant independent variable both in the long term and short term, it can be concluded that the exchange rate in the long term and short term is the main determining factor that affects the Balance of Payments in Indonesia. In the long run, Independent variables such as Gross Domestic Product and the exchange rate on the dependent variable Balance of Payments in Indonesia have a significant effect on the dependent variable Balance of Payments. Whereas in the short run, the exchange rate variable has a significant effect, and for other independent variables such as the GDP variable and the inflation rate does not have a significant effect.

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THE FACTORS ANALYSIS THAT INFLUENCE ONINFLATIONIN INDONESIA

MBA - Journal of Management and Business Aplication ◽

10.31967/mba.v3i2.356 ◽

2020 ◽

Vol 3 (2) ◽

pp. 302-307

Author(s):

Helmi Agus Salim ◽

Nely Supeni

Keyword(s):

Exchange Rate ◽

Gross Domestic Product ◽

Interest Rates ◽

Inflation Rate ◽

Rate Coefficient ◽

Domestic Product ◽

Simultaneous Test ◽

Factors Analysis ◽

The Exchange Rate ◽

The Interest Rate

MBA –JournalofManagementandBusinessAplicationPage 302MBAJournalofManagementandBusinessAplicationTHE FACTORS ANALYSIS THAT INFLUENCE ONINFLATIONIN INDONESIAHelmi Agus Salim1Nely Supeni2Higher Education of Economic MandalaEmail: [email protected] is an interesting topic to discuss because it has a broad impact on macroeconomic aggregates such as on economic growth, product competitiveness, interest rates and income distribution. Inflation is a dilemma that haunts the economy, especially developing countries especially Indonesia is a country with an estimated economic level in the world. Therefore there are several things that will be studied and examined to find out these problems including the effect of fuel subsidies, the effect of the Rupiah exchange rate against the US Dollar, the influence of interest rates, and the influence of Gross Domestic Product (GDP) on the inflation rate in Indonesia. The research method for analyzing data used is multiple regression. The results showed the Subsidy Variable (LS) had a positive regression coefficient of 0.1270 to inflation, the exchange rate coefficient (LK) was 0.5915 to inflation, the value of the interest rate coefficient (LSB) was -0.88638 to inflation, the GDP coefficient (LG) is 0.1489 of inflation. Based on the simultaneous test, it can be seen that the F statistic is 390 with a prob (F-statistic) of less than one percent, so these statistics mean that together the independent variables in the research model include the value of government subsidies, the exchange rate of the Rupiah against the USD, interest rates, and Gross Domestic Product / GDP of Indonesia together influence the inflation rate in Indonesia.Keywords:Inflation, Rupiah Exchange Rate, Interest Rates, Gross Domestic Product

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Determinants of External Debt in Jordan: An Empirical Study (1990–2014)

International Business Research ◽

10.5539/ibr.v9n7p116 ◽

2016 ◽

Vol 9 (7) ◽

pp. 116 ◽

Cited By ~ 4

Author(s):

Torki M. Al-Fawwaz

Keyword(s):

Exchange Rate ◽

Empirical Study ◽

Gross Domestic Product ◽

Trade Openness ◽

External Debt ◽

Domestic Product ◽

Annual Data ◽

Independent Variables ◽

Long Run ◽

Per Capita

This study aimed at investigating the major determinants influencing the external debt in Jordan during the period (1990-2014).To achieve this goal, annual data has been used during the period study, through applying ARDL model which consist of the dependent (external debt) and independent variables (trade openness, term of trade, exchange rate, and gross domestic product per capita).The study reviled that there is a positive statistically significant effect trade variable on the external debt in the long run, and a negative statistically significant effect for the gross domestic product per capita variable (GDPpc) on the external debt.The study recommended that it is very important to depend on the available recourses in trading rather that depend on external debt.

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The Effect of Economic Variables in the Exchange Rate of the Iraqi Dinar for the Period (1995-2015)

Journal of University of Human Development ◽

10.21928/juhd.v0n0y2018.pp98-113 ◽

2018 ◽

pp. 98

Author(s):

Muslim Qasim

Keyword(s):

Exchange Rate ◽

Theoretical Framework ◽

Economic Variables ◽

The Third ◽

Exchange Rate Fluctuations ◽

The Exchange Rate ◽

Relationship Of ◽

The Relationship

This study aims to identify the trends of fluctuations of Iraqi dinar exchange rate along with diagnosis the factors that influencing it. The importance of this study is that it attempts to examine the mechanisms of impacts some economic variables on the exchange rate fluctuations of Iraqi economy as a result of the use of the Iraqi Central Bank's policies. This study based on a hypothesis that states: Iraqi dinar exchange influenced by several factors and variables, some are fact and some are because the hard cash that led to the occurrence of fluctuations. Since the cash supply has a positive as well as a significant impact on creating and finding these fluctuations. This study comprises three sections: first section presenting the theoretical framework of the exchange rate. Second section focuses on the Relationship of the exchange rate of the Iraqi dinar with economic variables. Finally, the third section analyzes the results of impacts some economic variables on the Iraqi dinar fluctuations exchange rate for the period of (1995-2015). The study found a set of results, and based on the outcomes of the study a number of recommendations has been presented.

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Analysis of the Effect of Exchange Value, Inflation, Product Sharing and Gross Domestic Products on Development Sharia Banking Assets in Indonesia

International Journal of Research and Review ◽

10.52403/ijrr.20210622 ◽

2021 ◽

Vol 8 (6) ◽

pp. 180-192

Author(s):

Muhammad Arif ◽

HB. Tarmizi SU ◽

M. Syafi’i

Keyword(s):

Exchange Rate ◽

Panel Data ◽

Gross Domestic Product ◽

Profit Sharing ◽

Fixed Effect ◽

Domestic Product ◽

Islamic Banks ◽

Islamic Bank ◽

Effect Model ◽

The Exchange Rate

Islamic banks have had a significant development in assets, where during the last ten years the assets of Islamic banks reached 524 trillion rupiah in 2019. However, although the number of assets tends to increase, the percentage of Islamic bank assets grew slowly from 2016 to 2019. It was recorded that the growth of Islamic bank assets in 2016 grew by 22.10% (yoy) and finally in 2019 it grew by 9.93% (yoy), in line with the slowdown in financing channeled by Islamic banks. Banks in their operational activities cannot be separated from the influence of economic conditions. In this study, using analysis from outside the company, namely by using analysis of the macroeconomic environment. Macroeconomic variables used are the exchange rate, inflation, and Gross Domestic Product (GDP), where these three factors are the impact of the global financial crisis in 2008, and greatly affect the condition of the Indonesian economy. As well as the internal factors of the bank itself, namely profit sharing. The purpose of this study is to determine how much influence the exchange rate, inflation, profit sharing, and GDP both partially and simultaneously affect the development of Islamic bank assets in Indonesia. This type of research is quantitative research with panel data. This study uses panel data regression analysis techniques, namely using data combining cross section and time series, where this research is carried out using the common effect, fixed effect and random effect model specification test using the Chow test and the Hausman test. The population and sample of this study are the 10th quarterly financial reports of Islamic commercial banks in Indonesia using purposive sampling technique. The model chosen in this study is the Fixed Effect Model (FEM). The results showed that partially the exchange rate and inflation variables had a positive but insignificant effect on the development of Islamic bank assets, while the profit sharing variables and gross domestic product had a positive and significant effect on the development of Islamic bank assets. While simultaneously the exchange rate, GDP, inflation and profit sharing variables have a positive and significant effect on the development of Islamic bank assets. Keywords: Exchange Rate, Inflation, Profit Sharing, GDP and Asset Development.

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DANA PIHAK KETIGA DAN FAKTOR-FAKTOR YANG MEMPENGARUHINYA PADA PERBANKAN SYARIAH DI INDONESIA

Signifikan Jurnal Ilmu Ekonomi ◽

10.15408/sjie.v2i2.2426 ◽

2013 ◽

Vol 2 (2) ◽

Author(s):

Dewi Sartika

Keyword(s):

Exchange Rate ◽

Gross Domestic Product ◽

Regression Model ◽

Statistical Method ◽

Financial Statements ◽

Multiple Regression Model ◽

Third Party ◽

Domestic Product ◽

Islamic Banking ◽

The Exchange Rate

This study examines the effect of GDP (Gross Domestic Product) and the exchange rate on U.S. dollar against the TPF (Third Party Funds) in Indonesia. The objective of Islamic banking in this study was to analyze the influence of GDP (Gross Domestic Product) Rupiah rate against U.S. dollar deposits (Fund Party Third) of Islamic banking in Indonesia. In writing this makes the GDP (Gross Domestic Product) and the rupiah rate to U.S. dollar as the variables that influence to measure how much influence on Deposits (Third Party Funds). This study used 24 samples comprising the financial statements starting from January 2004 till December 2009. The method used in this study is the statistical method with a multiple regression model, where to find or measure how much influence given by the GDP (Gross Domestic Product) and exchange rate on U.S. dollar against the TPF (Third Party Funds) Islamic banking. The result showed that the variables GDP (Gross Domestic Product) and the exchange rate on U.S. dollar deposits have a significant effect on the Fund (Third Party) Islamic banking in IndonesiaDOI: 10.15408/sjie.v2i2.2426

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Kinerja Keuangan dan Faktor Ekonomi Makro sebagai Penentu Return Saham Perusahaan pada Jakarta Islamic Index

Jurnal Riset Akuntansi & Perpajakan (JRAP) ◽

10.35838/jrap.2017.004.01.6 ◽

1970 ◽

Vol 4 (01) ◽

pp. 63-72

Author(s):

Ressy Thusda Permala ◽

Arles P. Ompusunggu

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Gross Domestic Product ◽

Interest Rates ◽

Stock Returns ◽

Return On Investment ◽

Domestic Product ◽

Macroeconomic Factors ◽

Earnings Per Share ◽

The Exchange Rate

ABSTRACT The purpose of this study is to analyze the effect of return on investment, earnings per share, interest rate, exchange rate, inflation and gross domestic product on stock returns in Indonesia Stock Exchange. The sample used were 9 issuers registered in the Jakarta Islamic Index during the period of 2008- 2014. The analysis was done by multiple regression test. The results showed that the exchange rate and the gross domestic product had a significant effect on stock return, while return on investment, earnings per share, interest rate, and inflation had no effect. Based on the results of research macroeconomic factors determining stock returns on samples tested are the exchange rate and gross domestic product, but interest rates and inflation have no effect. The same is true in earnings per share and operational performance also does not affect stock returns. ABSTRAK Tujuan penelitian ini adalah untuk menganalisis pengaruh return on investment, earning per share, suku bunga, kurs, inflasi dan product domestic bruto terhadap return saham di Bursa Efek Indonesia. Sampel yang digunakan sebanyak 9 emiten yang terdaftar dalam Jakarta Islamic Index selama periode 2008-2014. Analisis dilakukan dengan uji regresi berganda. Hasil penelitian menunjukkan bahwa kurs dan product domestic bruto berpengaruh signifikan terhadap return saham, sedangkan return on investment, earning per share, suku bunga, dan inflasi tidak berpengaruh. Berdasarkan hasil penelitian faktor ekonomi makro penentu return saham pada sampel yang diuji adalah kurs dan product domestic bruto, tetapi suku bunga dan inflasi tidak berpengaruh. Hal yang sama terbukti pada laba per saham dan kinerja operasional juga tidak mempengaruhi return saham. JEL Classification: E44, L16

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An Empirical Analysis Of The Determinants Of Exchange Rate In Nigeria

International Journal of Scientific Research and Management ◽

10.18535/ijsrm/v6i5.em07 ◽

2018 ◽

Vol 6 (5) ◽

Cited By ~ 1

Author(s):

Oke, Michale Ojo. ◽

Adetan, Taiwo Temitayo

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Gross Domestic Product ◽

Inflation Rate ◽

Exchange Rate Policy ◽

Domestic Product ◽

Goods And Services ◽

Negative Effect ◽

Rate Policy ◽

The Government

This study examined empirically the determinants of exchange rate in Nigeria using the ARDL Bounds test approach to co-integration for the period spanning 1986-2016. The result of the analysis shows that the gross domestic product (GDP), Interest rate (INT) and inflation rate (INF) have positive effect on exchange rate in Nigeria while degree of openness (DOP) recorded a negative effect on exchange rate (EXR) in Nigeria. The Error Correction Mechanism result appeared to be correctly signed and significant. The study therefore concluded that gross domestic product, interest rate and inflation rate are the major determinant of exchange rate in Nigeria under the study period. It is therefore recommended that government should focus more on production of goods and services that can be exported and also introduce policies that can discourage importation of goods into the country. The government must pursue a realistic and pragmatic exchange rate policy in the less free trade areas that would stem capital flight and ensure more investment in the Nigerian economy.

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ANALISIS PENGARUH PRODUK DOMESTIK BRUTO, TINGKAT INFLASI, DAN NILAI TUKAR RUPIAH ATAS US DOLLAR TERHADAP IMPOR INDONESIA PERIODE 2010.Q1 – 2017.Q4

Visi Sosial Humaniora ◽

10.51622/vsh.v1i1.31 ◽

2020 ◽

Vol 1 (1) ◽

pp. 31-43

Author(s):

Jusmer Sihotang ◽

Yabes Gulo

Keyword(s):

Exchange Rate ◽

Gross Domestic Product ◽

Inflation Rate ◽

Domestic Product ◽

Series Data ◽

Multiple Regression Equation ◽

Independent Variables ◽

Real Gross Domestic Product ◽

Us Dollar ◽

The Impact

This study aims to analyze the effect of Gross Domestic Product (GDP), inflation rate, and the Indonesian Rupiah (IDR) exchange rate to US Dollar on Indonesian imports. The study uses multiple regression equation models using secondary time series data in the period of 2010.Q1 to 2017.Q4. The results showed that the coefficient sign of each regression independent variable (real Gross Domestic Product, inflation rate, and Indonesian Rupiah (IDR) exchange rate on US Dollar) were in accordance with theoretical expectations, and all of these independent variables could explain for 60.3 percent of the diversity of the dependent variable namely imports Indonesia. Both simultaneously and individually all these independent variables significantly influence Indonesia's imports at the level of α = 1%. The real Gross Domestic Product and inflation rate have a positive and significant effect on Indonesian imports, while the Indonesian Rupiah (IDR) exchange rate on US Dollar has a negative and significant effect on Indonesia's imports. Based on the results of the study, in order to control Indonesia's imports in the future, a policy should be guarantee the availability of various imported substitution products, easy to obtain, and can compete with imported products. Thus the impact of the increase in Gross Domestic Product, an increase in the inflation rate, and the appreciation of the rupiah against the increase in Indonesian imports will be controlled.

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