COINTEGRATION BETWEEN EXCHANGE RATE AND INTEREST RATE DIFFERENTIAL: THE CASE OF PAK RUPEE/US DOLLAR

Authors

  • Dr.Anwar Ali Shah G.Syed Sindh University-Dadu Campus
  • Faiz M.Shaikh SZABAC-Dokri-Larkana Sindh
  • Abdul Sattar Shah IBA-University of Sindh-Jamshoro
  • Muhammad Akram Student of Iqra university Islamabad campus

DOI:

https://doi.org/10.24297/ijmit.v10i5.617

Keywords:

exchange rate, interest rate differential.

Abstract

Empirical literature is inconclusive whether a relationship exists between Interest Rate Differential and exchange rate. However, theoretical literature suggests that such positive relationship exists between these variables. Monthly interest rate data between Pakistan and USA from Jan 2001 to December 2010 was taken and co-integration technique was applied to empirically test the relationship between both variables. The results show no relationship exists between these variables. This results supports the findings of previous studies of Edison and Pauls (1993) and Shah,A and Saeed Ur Reham (2010).

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Author Biographies

  • Dr.Anwar Ali Shah G.Syed, Sindh University-Dadu Campus

    Prof. of Business Administration & Pro-Vice Chancellor

  • Faiz M.Shaikh, SZABAC-Dokri-Larkana Sindh
    Assistant Professor
  • Abdul Sattar Shah, IBA-University of Sindh-Jamshoro
    Assistant Professor

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Published

2015-01-26

Issue

Vol. 10 No. 5 (2015)

Section

Articles

License

Creative Commons License All articles published in Journal of Advances in Linguistics are licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

COINTEGRATION BETWEEN EXCHANGE RATE AND INTEREST RATE DIFFERENTIAL: THE CASE OF PAK RUPEE/US DOLLAR. (2015). INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY, 10(5), 2146-2150. https://doi.org/10.24297/ijmit.v10i5.617

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