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The Impact of Interest Rate in Determining Exchange Rate: Revisiting Interest Rate Parity Theory

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dc.contributor.author Perera, P.R.M.R.
dc.contributor.author Silva, N.L.C.
dc.contributor.author Silva, N.K.L.
dc.date.accessioned 2016-12-02T05:19:11Z
dc.date.available 2016-12-02T05:19:11Z
dc.date.issued 2016
dc.identifier.citation Perera, P.R.M.R., Silva, N.L.C. and Silva, N.K.L. 2016. The Impact of Interest Rate in Determining Exchange Rate: Revisiting Interest Rate Parity Theory. 7th International Conference on Business & Information ICBI – 2016, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka. p 21. en_US
dc.identifier.issn 2465-6399
dc.identifier.uri http://repository.kln.ac.lk/handle/123456789/15367
dc.description.abstract Objective of this study is to examine the relationship between Interest rate and the Exchange rate and to find the effect of changes in Interest rate on Exchange rate volatilities. Exchange rate is sensitive to number of factors, where interest rate is identified as a major factor. Central Bank of Sri Lanka provides quantitative evidence for the study, where Sri Lanka Inter-Bank Offer Rate (SLIBOR) constitutes the independent variable and US Dollar to Sri Lankan Rupee exchange rate represents dependent variable. Sample spreads through 4 years and contains daily data. Data set is proven to be normally distributed. Correlation and Linear Regression Model is used to ascertain relationships. Results of the study are consistent with Interest Rate Parity theory that discloses a strong positive relationship between Interest rate and Exchange rate. This study extends the literature on international financing and provides valuable information to decision makers in small open economies and to the academia. en_US
dc.language.iso en en_US
dc.publisher Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka en_US
dc.subject Interest Rate en_US
dc.subject Exchange Rate en_US
dc.subject Central Bank of Sri Lanka en_US
dc.subject Exchange Rate Parity en_US
dc.title The Impact of Interest Rate in Determining Exchange Rate: Revisiting Interest Rate Parity Theory en_US
dc.type Article en_US


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