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Impact of Macroeconomic Variables on Exchange Rate: An Evidence from Pakistan

  • Muhammad MohsinEmail author
  • Li Naiwen
  • Muhammad Kashif Majeed
  • Sobia Naseem
Conference paper
Part of the Springer Proceedings in Business and Economics book series (SPBE)

Abstract

The purpose of this research is to provide the evidence on the relationship between Real Exchange rate (REXR) against US dollar and macroeconomic variables in Pakistan. This study has taken real exchange rate is dependent variable and some other macroeconomic variables are as independent variables. To examine this relationship the ordinary least square regression (OLS) technique is used. This technique was used by Zamir et al. (2017). The results shows that current balance (CB) is negatively significant at 10% level, the inflation and foreign direct investment (FDI) is also negatively significant at 5, 1% respectively. But the Gross domestic product per capita (GDP) is positively significant at 5% level. The Trade openness (OP) shows no important relation with real exchange rate (REXR). Further the ARCH LM test provides result there is no serial correlation and to check the heteroskedasticity whit test is used this test shows the result there is no heteroskedasticity. This study is helpful for international investor and also to increase export for a country.

Keywords

OLS REXR Macroeconomic variables ARCH-LM test White test 

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Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Muhammad Mohsin
    • 1
    Email author
  • Li Naiwen
    • 1
  • Muhammad Kashif Majeed
    • 2
  • Sobia Naseem
    • 2
  1. 1.College of Business AdministrationLiaoning Technical UniversityXingchengChina
  2. 2.Liaoning Technical UniversityFuxinPeople’s Republic of China

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