Determinants of the Choice of Exchange Rate Regimes in OIC Countries

Ali Fegheh Majidi ()
Additional contact information
Ali Fegheh Majidi : University of Kurdistan

Journal of Money and Economy, 2014, vol. 9, issue 3, 85-118

Abstract: Several political and economic factors are involved in choosing exchange rate policy in Organization of Islamic Cooperation (OIC) countries. In the present study, these factors have been investigated with an emphasis on OCA and political economic factors during 1990 -2014. The result shows that OCA and political economic factors as well as tradable sector are influential on exchange rate policy in OIC countries. In a way that oil revenue, financial development, GDP, openness of the economy, economic development and political instability all tend to increase the probability of pegging the exchange rate regimes, whereas an increasing industrial sector and size of the economy lead to a decrease in the probability of pegging the exchange rate regimes. Inflation, democracy, political system, legislative system, and monetary crises had no significant effect on the exchange rate regime. Also, the results show that the democracy and oil revenue had the highest impact on choosing exchange rate regime and financial development and monetary crises risk had the least impact on choosing exchange rate regime.

Keywords: Exchange rate regime; OIC; OCA theory; Political economy (search for similar items in EconPapers)
JEL-codes: C01 F31 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jme.mbri.ac.ir/article-1-119-en.pdf (application/pdf)
http://jme.mbri.ac.ir/article-1-119-en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmonec:v:9:y:2014:i:3:p:85-118

Access Statistics for this article

More articles in Journal of Money and Economy from Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran Contact information at EDIRC.
Bibliographic data for series maintained by M. E. ().