Factors Influencing Exchange Rate: An Empirical Evidence from Bangladesh

Factors Influencing Exchange Rate: An Empirical Evidence from Bangladesh

Tanvir Hasan Anik

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Md. Shohel Rana

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Md. Nurul Kabir Biplob

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Begum Rokeya University

Factors Influencing Exchange Rate: An Empirical Evidence from Bangladesh

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Abstract

Literature effect of exchange rate fluctuations is caused by some macro-economic variables but there have not enough study in this important field. Our purpose was to generalize the main factors behind exchange rate fluctuations of Bangladesh from 1987-2017. We used ADF and PP test for stationary analysis that is unit root test satisfied preconditions for Johansen co-integrating test. Correlation matrix shows the relationships of independent variables with dependent one and agreed with FMOLS test. We find no serial correlation in Q-statistics, LM and Heteroscedasticity test. Johansen co-integration test specifies that there are no co-integrating equations for long run relationship rather the relationship is short run. VAR model and Ganger causality test shows there is a significant effect of Remittance, GDP growth and International trade to Exchange rate fluctuations because R-squared values are more than 60%. Wald test supports the VAR model results by ensuring that there also joint effect of independent variables. Results from FMOLS test concluded that GDP growth and International trade positively affect exchange rate. Remittance has negative effect on exchange rate.

References

1 Cites in Article

Reference Format

Q Abbas,J Iqbal,L Ayaz (2012). Relationship between GDP, inflation and real interest rate with exchange rate fluctuation of African countries.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

How to Cite This Article

Tanvir Hasan Anik. 2019. \u201cFactors Influencing Exchange Rate: An Empirical Evidence from Bangladesh\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 19 (GJMBR Volume 19 Issue C6).

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GJMBR Volume 19 Issue C6

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification JEL Code: F31

Submission ReceivedDecember 9, 2018
Peer Review Double Blind
Handling Editor
Accepted January 5, 2019
Published January 15, 2019

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v1.2

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October 17, 2019

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