The Effect of Interest Rate Changes on Exchange Rate in Egypt (An Applied Study)
DOI:
https://doi.org/10.56830/IJAMS07202305Keywords:
Interest rate on deposits, Interest rate on loans, Exchange RateAbstract
This study aims to measure the impact of interest rates on deposits on the exchange rate and measure the effect of interest rates on loans on the exchange rate. The first hypothesis states that interest rates on deposits don't affect on exchange rate. The second hypothesis states interest rates on loans don't affect the exchange rate, The researcher will be relying on a combination of inductive and deductive approaches to carry out two types of study as follows: An Analytical study through the analysis of books, periodicals, theses related to interest rate and exchange rate. An applied study, The study period has been applied to the monthly weighted average interest rate on loans and deposits and the monthly weighted average exchange rate in Egypt for the period from January 1, 2021, to March 31, 2022) relying on the Excel program to prepare data. The results of the statistical study to test the first hypothesis show: a weak positive relationship between the independent variable (Weighted Average Interest Rates deposits) and the dependent variable (exchange rate). The higher the Interest Rates deposits, the higher the value of the exchange rate. The results of the statistical study to test the second hypothesis show: a positive relationship between the independent variable (Interest Rates on loans) and the dependent variable (exchange rate).The higher the Interest Rates on loans, the higher the value of the exchange rate.
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