Open Access
Subscription or Fee Access
An Analysis of Macroeconomic Factors Affecting Foreign Exchange Rate
The Indian Rupee is launching its foot print in global market, which can be characterized by the fact that Bhutan and Nepal peg their currencies to Indian Rupee. The Indian economy contributes a higher GDP growth compared to other emerging economies. The increase in the GDP, aids well for a strong foreign exchange along with other economic factors such as gross domestic savings, forex reserve, inflation and so on. The various initiatives taken by the government recently to attract more foreign capital through various investment schemes and reduce interest rate as well assists to achieve a stabilized exchange rate in India. The RBI is focused for capital account convertibility, with various measures to achieve a freely floating currency from the present managed float in India. In view of recent appreciation of Chinese Yuan, it became tough for policy makers to take up an immediate action in supporting the home-grown industries. In this context, the research focuses to find and evaluate the various macroeconomic factors affecting the exchange rate and to model the factors using Auto Regressive Distributive Lag, to enable to forecast the exchange rate. The research focuses on finding the significant factors influencing the volatility of the exchange rate.
Keywords
Macroeconomic Variables, Econometric Modeling, ADF Test, Vector Auto Regressive Model, ARDL.
User
Manuscript Submission
Information
Publications
- Contemporary Research in Management
- Excerpts of select Summer Internship Reports 2011
- Conference Proceedings
- International conference on Emerging Trends in Finance and Accounting
- International Conference on Managing Human Resources at the Workplace
- Excerpts of select Summer Internship Reports 2012
- Monthly Newsletter
- Apte P. G.. (2014). International Financial Management, Tata Mcgraw Hill Publishing Limited
- Boykorayev, B. (2008). Factors that determine nominal exchange rates and empirical evidence of cross-sectional analysis, retrieved frompure.au.dk/portal-asb-student/files/3262/Bahodir _Boykorayev._Master_thesis.pdf.
- Deepti Gulati & Monika Kakhani. (2012). Relationship Between Stock Market and Foreign Exchange Market in India: An Empirical Study. Pacific Business Revier International, retrieved from www.pbr.co.in/Vol-5%20Iss-5/7.pdf
- Khera, K., & Singh, I. (2015). Effect of macro economic factors on rupee value. Delhi Business Review, 16(1), 87–96.
- Madhu, Vij. (2014). International Financial Management, Tata Mcgraw Hill Publishing Limited
- Mirchandani, A. (2013). Analysis of Macroeconomic Determinants of Exchange Rate Volatility in India. International Journal of Economics and Financial Issues, 3(1), 172–179.
- Mohd, W., Mohd, Y., Hafizha, N., Yusuf, M., Azreen, S., Zulkifli, M., Ibrahim, N. J. et al. (2016). Macroeconomic Factors That Influence Exchange Rate Fluctuation in ASEAN Countries. International Academic Research Journal of Social Science, 2(1), 89–94.
- Raju, J. V. R. (2014). An Econometric analysis pertaining to exchange rate dynamics in India Retrived from www.sibm.edu/assets/pdf/samvad8/econometric.pdf
- Ramasamy, R., & Abar, S. K. (2015). Influence of Macroeconomic Variables on Exchange Rates.Journal of Economics, Business & Management, 3(2), 276–281. Retrieved from https://doi.org /10.7763/JOEBM.2015.V3.194
- Twarowska, K. (2000). Analysis of factors affectng fluctuations in the exchange rate of Polish Zloty against Euro, retrieved from www.toknowpress.net/ISBN/978-961-6914-09-3/papers/ML14-652.pdf.
- Vidyavathi, B., Keerti, K., & Pooja, A. (2016). A Study on macro economic indicators and their impact on exchange rates. International Journal of Engineering and Management Studies, 7(3), 160–169.
- Yamini Karmarkar, M. K. & A. M. (2012). Exchange Rate and Macro-economic indicators: A Causal Study for India of the Past Decade. Pacific Business Review International, Retrieved from www. pbr.co.in/PDF%20Copy/9.pdf.
Abstract Views: 434
PDF Views: 108