EDITORIAL

Endeavoring to investigate the connection between interest rate dynamics and the foreign exchange rate in China at the time of the breakout and expansion of the influence of the COVID-19 pandemics, the coauthors Muntazir Hussain, Irfan Saleem and Usman Bashir apply detrended cross-correlation to car...

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Bibliographic Details
Published in:Ekonomski horizonti 2023-05, Vol.25 (2), p.91-92
Main Author: Jakšić, Milena
Format: Article
Language:English
Subjects:
COVID-19
Economic conditions
Economic growth
Interest rates
Pandemics
Online Access:Get full text
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Summary:Endeavoring to investigate the connection between interest rate dynamics and the foreign exchange rate in China at the time of the breakout and expansion of the influence of the COVID-19 pandemics, the coauthors Muntazir Hussain, Irfan Saleem and Usman Bashir apply detrended cross-correlation to carry out an analysis of the data on a daily basis during the period from early 2019 to mid-2021. The results of the econometric analysis point to the presence of a positive cross-correlation between the interest rate and the foreign exchange rate in China, which was extremely weak at the beginning of the period of observation, only to be growing stronger and stronger over time. [...]analysis made in the paper, however, leads to the conclusion that the conventional approach to the monetary policy, according to which higher interest rates are established with the aim of defending the foreign exchange rate, can prove to be as an insufficiently good solution during pandemic-induced crises.
ISSN:1450-863X
2217-9232