Munich Personal RePEc Archive

Financial Crisis and Exchange Rates in Emerging Economics: An Empirical Analysis using PPP-UIP-Framework

Rashid, Abdul and Saedan, Mashael (2013): Financial Crisis and Exchange Rates in Emerging Economics: An Empirical Analysis using PPP-UIP-Framework.

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Abstract

This paper empirical investigates the effects of 2008 financial crisis on exchange rate determination in PPP-UIP framework for four emerging countries, using monthly date over the period 1981-2012. The results suggest that the impact of recent financial crisis led to change the role of determines of exchange rates in exchange determination. The findings also reveal that the effects of financial crisis on the exchange rate are different in all the four emerging economies. The findings of the study are of significant for policy makers in designing effectives policies in order to reduce the effects of financial crisis on exchange rates.

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