Trade reserve and exchange rate: a comparative analysis of high, moderate, and low trade openness countries

Suleman, Shahida and Mohd Thas Thaker, Hassanudin and Cheong, Calvin Wing Hoh (2025) Trade reserve and exchange rate: a comparative analysis of high, moderate, and low trade openness countries. Journal of Economic Policy Reform, 28 (2). pp. 163-183. ISSN 1748-7870 E-ISSN 1748-7889

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Abstract

This study aims to comprehensively examine the impact of trade reserves (TR) on exchange rates (ER) across different degrees of openness economies – specifically high, moderate, and low openness – from 1997 to 2020. Utilizing advanced panel regression techniques, the research assesses long-term dynamics through Pedroni cointegration and explores causal relationships via Granger causality tests. The findings indicate both long-term and short-term relationships between TR and ER. Notably, the study reveals a significant inverse effect of TR on ER, with the impact of trade on ER being particularly pronounced in low-openness economies.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Trade openness; trade reserves; exchange rate; degrees of openness
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HB Economic Theory > HB221 Price H Social Sciences > HB Economic Theory > HB801 Consumption. Demand H Social Sciences > HC Economic History and Conditions H Social Sciences > HC Economic History and Conditions > HC94 By region or country
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Dr Hassanudin Mohd Thas Thaker
Date Deposited:	20 May 2025 09:00
Last Modified:	20 May 2025 14:27
URI:	http://irep.iium.edu.my/id/eprint/121128

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