Relationship Between GDP, Inflation and Real Interest Rate with Exchange Rate Fluctuation of African Countries

Qaisar Abbas (), Javid Iqbal () and Ayaz ()
Additional contact information
Qaisar Abbas: COMSATS Institute of Information Technology
Javid Iqbal: COMSATS Institute of Information Technology
Ayaz: COMSATS Institute of Information Technology

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2012, vol. 2, issue 3, 132-141

Abstract: This paper tries to explore the relationship between, gross domestic product, inflation and real interest rate with the exchange rate. 10 African countries with 15 years of data from 1996 to 2010 were used for this study. Three independent variables i.e. inflation, interest rate and Gross Domestic Product were used in order to investigate their relationship which causes exchange rate fluctuations. Three hypotheses served as a basis to analyze the results. Based on the analysis, it is found that that the GDP has significant relationship with the exchange rate where interest and inflation has non-significant relationship with the exchange rates of African countries.

Keywords: Exchange rate; inflation; real interest rate; and gross domestic product (search for similar items in EconPapers)
JEL-codes: E31 E43 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:2:y:2012:i:3:p:132-141

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