INTERRELATION BETWEEN THE EXCHANGE RATE AND THE INTEREST RATE IN ROMANIA

Catalina Handoreanu
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Catalina Handoreanu: Academy of Economic Studies, Bucharest

Theoretical and Applied Economics, 2008, vol. 12(517)(supplement), issue 12(517)(supplement), 90-97

Abstract: Lately, the connection between the exchange rate and interest rate has once again caught the attention of the researchers. The volatility of the two macroeconomic indicators has an almost simultaneous effect on the inflation, real income, exports and imports, which influence the long-term development. This working paper analyses, besides the UIP hypothesis, the reverse relationship of the exchange rate on the interest rate as this paper sets out to determine the role of Romanian exchange rate on achieving macroeconomic stability.

Keywords: exchange rate; interest rate; UIP; transitional economy; monetary policy. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:12(517)(supplement):y:2008:i:12(517)(supplement):p:90-97

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