Impact of Exchange Market Forces on Pak-Rupee Exchange Rates during Globalization Period: An Empirical Analysis | Zendy

Syed Adnan Haider Ali Shah Bukhari | Zendy; Muhammad Shahbaz Akmal | Zendy; Mohammad Sabihuddin Butt | Zendy

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Impact of Exchange Market Forces on Pak-Rupee Exchange Rates during Globalization Period: An Empirical Analysis

Author(s) -

Syed Adnan Haider Ali Shah Bukhari,

Muhammad Shahbaz Akmal,

Mohammad Sabihuddin Butt

Publication year - 2006

Publication title -

the lahore journal of economics

Language(s) - English

Resource type - Journals

eISSN - 1811-5446

pISSN - 1811-5438

DOI - 10.35536/lje.2006.v11.i1.a7

Subject(s) - rupee , devaluation , economics , exchange rate , monetary economics , globalization , liberian dollar , international economics , currency , foreign exchange market , market economy , finance

This paper analyzes the impact of exchange market forces on Pak-Rupee/US dollar exchange rates during the 1965-1971 globalization period. The main findings are that a) the behavior of Pakistan’s fundamentals relative to those of the USA help to explain exchange market forces against the Pak-Rupee; b) during the run up to devaluation in the globalization period the monetary authorities in Pakistan were acting to reduce domestic credit; but that c) additional pressure was brought against the Pak-Rupee from speculative sources. These findings relate to current thinking on the choice of the exchange rate regime as even well behaved fundamentals may not be sufficient to sustain a currency on its peg.

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