THE EFFECT OF EXCHANGE RATES ON INTEREST CHANNELS IN MSCI DEVELOPING MARKETS INDEX

Abstract

Morgan Stanley Capital International The objective of this study, where there are those in the emerging markets index, is within the continuity and impact level of the effect of interest rate on the exchange rate. In this scope, the cross-sectional dependence method is available and the analyzes are obtained in Gauss codes and Eviews version 10.0. When the results obtained are evaluated, the interest variable has been determined to be statistically significant on the exchange rate in 7 countries. When the coefficient sizes are examined; Turkey and South Africa's interest in high-impact, low impact while Poland and Russia were obtained. Looking at the panel in general; When interest rates increase by 1 unit, the exchange rate decreases by 5.6%.