IDEAS home Printed from
   My bibliography  Save this article

The impacts of the stock price and country risk on the exchange rate in Singapore


  • Yu Hsing


Purpose - The purpose of this paper is to examine movements of the Singapore dollar exchange rate against the US dollar. Design/methodology/approach - An extended open macroeconomic model with the IS, LM, and AS functions and comparative static analysis are employed and applied. The Newey-West method is employed to estimate consistent estimates for the standard error and covariance when the forms of both autocorrelation and heteroskedasticity are unknown. Findings - The real exchange rate in Singapore is negatively associated with real M1, country risk, the real US treasury bill rate, and a binary variable for the period since the Asian financial crisis, and positively influenced by the real stock price, world output, and the amount of foreign exchange reserves. Real government deficit spending is statistically insignificant. Research limitations/implications - Other exchange rate models may be considered and compared. Practical implications - The Reserve Bank of Singapore may use the outcomes of this paper as a reference in monitoring exchange rate movements. Among others, changes in country risk, stock values, foreign exchange, the world interest rate, and world output are expected to influence the exchange rate. Originality/value - Several important variables such as country risk, the Asian financial crisis, stock values, and the amount of foreign exchange are included to find their impacts on the exchange rate.

Suggested Citation

  • Yu Hsing, 2008. "The impacts of the stock price and country risk on the exchange rate in Singapore," International Journal of Development Issues, Emerald Group Publishing, vol. 7(1), pages 56-61, June.
  • Handle: RePEc:eme:ijdipp:v:7:y:2008:i:1:p:56-61

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijdipp:v:7:y:2008:i:1:p:56-61. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.