1. Factors influencing Interest Rate of Five Emerging Economies.
- Author
-
ARSLAN, Erdal
- Subjects
INTEREST rates ,EMERGING markets ,FOREIGN exchange rates ,PRICE inflation - Abstract
The interest rate was and still a point of difference between economists. This difference is based on a difference in understanding the nature of the market in which the interest rate is determined and in enumerating the influencing factors in this market. Interest rate has a role to play in the national economy, but this role differs from one country to another due to different economic and political conditions. This study sheds light on the impact of changes of the US interest rate, the inflation rate and the exchange rate on the domestic interest rate in five emerging economies (Brazil, Russia, Turkey, China, and South Africa). The experimental results of the study were estimated by the dynamic least squares method and the causality test using monthly data during the period 2011-2019. The study concluded that the US interest rate has an inverse relationship with the interest rates of all sample countries included in the study at a significant level (5%). The increase in inflation and fluctuations in the exchange rate contributed to raising interest rates in the sample country. The results of causality test also indicated that the inflation rate and the exchange rate cause interest rates in Brazil, Turkey and South Africa in the long term. [ABSTRACT FROM AUTHOR]
- Published
- 2024