Project Leader: Prof Mohamed Ariff Syed Mohamed
Exchange rate volatility has been at the epicenter of several financial crises that led to economic declines, which usually also precipitates financial instability via currency depreciation. This research examines currency volatility as a measure of currency instability. Fifteen currencies are selected from developed and emerging economies to study this issue with data over the last 20 years. Much has been written by IMF and others about how countries manage their exchange rates in order to promote economic growth, especially sustainable trade, by designing proper exchange rate regimes for stability. It is possible, as shown by this study, to track a currency’s exchange rate instability using a given currency’s volatility of against the volatility of a benchmark ‘currency of importance’, termed relative volatility.
Publications:
- Ariff, M., and Zarei, A., (2018). “Sustainable development and the Currency Exchange Rate Behavior” in the Asian Economic Papers Vol 18 (in press) in Routledge journal.
- Ariff, M., and Zarei, A., (2018). “Sustainable Development Requires Stable Currency Exchange Rates” in Boubaker, S., Cummings, D., and Duc Nguyen (eds). Research Handbook of Investing in the Triple Bottom Line: Finance, Society and the Environment publisher Edward Elgar Publishing UK-USA.
