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The Relationship between Exchange Rate and Key Macroeconomic Indicators. Case Study: Romania


  • Anca Elena Nucu

    () (“Alexandru Ioan Cuza” University of Iasi,Romania)


The purpose of this article is to examine the influence of the following key macroeconomic indicators: GDP, inflation rate, money supply, interest rate and balance of payments on exchange rate of the Romanian leu against the most important currencies (EUR, USD) during 2000-2010 period. The main findings of our study are: it is an inverse relationship between exchange rate EUR/RON, Gross Domestic Product, respectively money supply and a direct relationship between exchange rate EUR/RON, inflation and interest rate. We can not validate the correlation between exchange rate and Balance of payment, because the test statistic is not significant.

Suggested Citation

  • Anca Elena Nucu, 2011. "The Relationship between Exchange Rate and Key Macroeconomic Indicators. Case Study: Romania," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 14(41), pages 127-145, September.
  • Handle: RePEc:rej:journl:v:14:y:2011:i:41:p:127-145

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    Cited by:

    1. Sinha, Pankaj & Kohli, Deepti, 2013. "Modeling exchange rate dynamics in India using stock market indices and macroeconomic variables," MPRA Paper 45816, University Library of Munich, Germany.

    More about this item


    exchange rate; GDP; money supply; inflation; balance of payment; econometric analysis;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • F31 - International Economics - - International Finance - - - Foreign Exchange


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