Impact of Exchange Rate on Balance of Payment: An Investigation from Pakistan

Research Journal of Finance and Accounting, Vol. 5, No.13, 2014, ISSN: 2222-1697

12 Pages Posted: 4 Aug 2014

See all articles by Nawaz Ahmad

Nawaz Ahmad

RTS (Research, Trainings, and Solutions); Institute of Business Management (IoBM)

Rizwan Ahmed

Indus University

Imamuddin Khoso

University of Sindh

Rana Palwishah

Indus University

Unaib Raza

Indus University

Date Written: July 5, 2014

Abstract

The purpose of the study is to determine the impact of exchange rate on Balance of Payment, through investigation of Pakistan Economy. Thus in order to ascertain the volatility of exchange rates & its tendency on balance of payment, monthly data was collected of Exchange rate and Balance of Payment from the official website of State Bank of Pakistan. The data comprised of seven year time period from January 2007 to October 2013. In order to achieve the purpose various test such as unit root, ARDL and Granger causality test are employed which helped us reached to the conclusion that there is a significant and positive relation between Exchange rate and BOP, therefore we could conclude that Stability of exchange rates may create a positive environment by encouraging the investment, and this can improves balance of payment.

Keywords: Balance of Payment, Exchange Rate, Pakistan, Volatility, State Bank

JEL Classification: B23, C12, C22

Suggested Citation

Ahmad, Nawaz and Raheem, Ahmed and Khoso, Imamuddin and Palwishah, Rana and Raza, Unaib, Impact of Exchange Rate on Balance of Payment: An Investigation from Pakistan (July 5, 2014). Research Journal of Finance and Accounting, Vol. 5, No.13, 2014, ISSN: 2222-1697. Available at SSRN: https://ssrn.com/abstract=2475552

Nawaz Ahmad (Contact Author)

RTS (Research, Trainings, and Solutions) ( email )

9th Nishat Lane, DHA 6
9th Nishat Lane, DHA 6
Karachi, Sindh 75500
Pakistan
00923009292422 (Phone)

Institute of Business Management (IoBM) ( email )

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Korangi Creek
Karachi, Sindh 75190
Pakistan

HOME PAGE: http://www.faculty.iobm.edu.pk/staff/nawaz-ahmad/

Ahmed Raheem

Indus University ( email )

ST-2D, Block 17, Gulshan-e-Iqbal
Gulshan-e-Iqbal
Karachi, Sindh 75300
Pakistan

Imamuddin Khoso

University of Sindh ( email )

Jamshoro, Sindh
Pakistan

Rana Palwishah

Indus University ( email )

ST-2D, Block 17, Gulshan-e-Iqbal
Gulshan-e-Iqbal
Karachi, Sindh 75300
Pakistan

Unaib Raza

Indus University ( email )

ST-2D, Block 17, Gulshan-e-Iqbal
Gulshan-e-Iqbal
Karachi, Sindh 75300
Pakistan

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