Determinants of the Indian rupee/US dollar exchange rate and policy implications
Yu Hsing
International Journal of Economics and Business Research, 2015, vol. 10, issue 2, 105-111
Abstract:
Based on a simultaneous-equation model of demand and supply, this paper finds that the Indian rupee/US dollar (INR/USD) exchange rate is positively associated with the US real government bond yield, Indian real GDP, the US real stock price and the expected INR/USD exchange rate and is negatively affected by the Indian real interest rate, US real GDP and the Indian real stock price. The finding that a higher Indian real interest rate would cause the Indian rupee to appreciate against the US dollar is consistent with the traditional view.
Keywords: exchange rates; interest rates; real GDP; stock prices; EGARCH; India; USA; United States; Indian rupee; US dollar; INR-USD exchange rate; government bond yield. (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:10:y:2015:i:2:p:105-111
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