الفهرس | Only 14 pages are availabe for public view |
Abstract Literature and economic theories indicate that exchange rate behavior responds to monetary policy actions; such that monetary policy shocks strongly affect the volatility of the exchange rate. (Audzei& Brazdik, 2012, p.5) but the effect depends on whether the country is a developed or developing country, the exchange rate regime followed in that country, the degree of openness of the economy, and also the behavior of exchange rate. from here, it was found that there is a debate behind the clear relationship between the monetary policy and the exchange rate. Although it is well known theoretically that expansionary monetary policy depreciates the domestic currency (increases the exchange rate), while contractionary monetary policy appreciates the domestic currency, still knowledge of the relevant mechanism is imperfect and incomplete; there is no universal agreement on a single theory of exchange rate determination, and quantitative analysis does not provide definite answers to these points. Thus, the role of monetary policy in affecting exchange rate or stabilizing its market in any specific country is still ambiguous. |