publication . Article . 2013

Interest Rates and Exchange Rate Relationship in BRIC-T Countries

Selim KAYHAN; Tayfur BAYAT; Ahmet UĞUR;
Open Access
  • Published: 01 Apr 2013 Journal: Ege Academic Review, volume 13, issue 2, pages 227-236
Abstract
This study examines the dynamic relationships between the real exchange rate and the real interest rate in the BRIC-T (Brazil, Russia, India, China and Turkey) countries by employing monthly data from the beginning of flexible exchange rate regime to July 2011. For this aim, non-linear causality test and frequency domain causality test approaches are used. According to frequency domain causality test results, interest rate affects exchange rate in only China and this effect exist only in the long run. On the other hand, exchange rate shocks induce changes in interest rate in the shorter period.
Subjects
free text keywords: Interest rate, real exchange rate, BRIC-T, Frequency domain, nonlinear causality, jel:E52, jel:E58, jel:F31, Exchange rate, Real interest rate, Causality, International Fisher effect, Interest rate, media_common.quotation_subject, media_common, China, Economics, Monetary economics, Exchange-rate regime, BRIC, International economics
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publication . Article . 2013

Interest Rates and Exchange Rate Relationship in BRIC-T Countries

Selim KAYHAN; Tayfur BAYAT; Ahmet UĞUR;