Journal of Economics and Financial Analysis, 7 (2), pp. 65-89, [2023]
URI: https://ojs.tripaledu.com/jefa/article/view/87/97

The Movement of Exchange Rate and Expected Income: Case of South Africa


University of KwaZulu Natal, South Africa


University of KwaZulu Natal, South Africa


DOI: http://dx.doi.org/10.1991/jefa.v7i2.a63

Abstract

Many studies have investigated the impact of expectations on the exchange rates. However, it remains a challenge linking the exchange rates to its fundamentals. This study seeks to determine the impact of expectations of future income on the exchange rates behaviour. In this study, we employ the Bayesian VAR method. The study finds that the expectations of income have effects on the exchange rate behaviour. Furthermore, the exchange rates behaviour is asymmetric.

Keywords

Expectations; Income; Output; Growth; Exchange Rates; FDI.

JEL Classification

E51.

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References

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