The effects of interest rates on the BRICS exchange rate: a 2SLS approach

Marco Kerbeg (), Mathias Tessmann (), Gustavo Haase () and Thiago Lourenço ()
Additional contact information
Marco Kerbeg: Bank of Brazil
Mathias Tessmann: Brazilian Institute of Education, Development and Research - IDP
Gustavo Haase: Bank of Brazil
Thiago Lourenço: Bank of Brazil

Economics Bulletin, 2025, vol. 45, issue 1, 237 - 242

Abstract: This study explores the impact of interest rates on the exchange rates of the BRICS nations—Brazil, Russia, India, China, and South Africa. By incorporating control variables such as inflation and broad money supply, this analysis employs Granger causality tests to detect potential endogeneity and estimates a Two-Stage Least Squares (2SLS) model using panel data. The findings reveal that interest rates significantly influence exchange rates in these countries, emphasizing their importance in the formulation of effective monetary policies.

Keywords: BRICS; Exchange Rate; Interest Rate; Inflation; Monetary Offer; 2SLS. (search for similar items in EconPapers)
JEL-codes: E3 E4 (search for similar items in EconPapers)
Date: 2025-03-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I1-P23.pdf (application/pdf)

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:ebl:ecbull:eb-24-00248

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().