IDEAS home Printed from https://ideas.repec.org/a/src/jbsree/v12y2026i2p333-342.html

Investigating the Impact of Monetary Policy on Balance of Payments of Pakistan: An Evidence from an ARDL Approach

Author

Listed:
  • Khan, Rida
  • Anwar, Ayesha
  • Khan, Sameer

Abstract

Purpose: The study investigates the impact of monetary policy on the balance of payments of Pakistan ranging from 1990 to 2023, motivated by the persistent external account imbalances of Pakistan and the role of monetary variables in shaping the performance of the country’s external sector.Methodology: Annual time series data were employed which was sourced from the World Bank World Development Indicators. The Autoregressive Distributed Lag bounds testing approach to cointegration was applied to analyse long run and short run dynamics between monetary policy variables —inflation, broad money, GDP, and real effective exchange rate — and the balance of payments (current account).Findings: The empirical results showed that, inflation, broad money, GDP and real effective exchange rate are significant in the long run. They showed an inverse relationship with the dependent variable that is balance of payments (current account). Broad money has a positive effect in the short run before the negative long-run effect materialises.Implications: The results indicate that effective monetary management, inflation control and exchange rate stability are important policy tools to improve the external balance sustainability of Pakistan

Suggested Citation

  • Khan, Rida & Anwar, Ayesha & Khan, Sameer, 2026. "Investigating the Impact of Monetary Policy on Balance of Payments of Pakistan: An Evidence from an ARDL Approach," Journal of Business and Social Review in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 12(2), pages 333-342, June.
    • Handle: RePEc:src:jbsree:v:12:y:2026:i:2:p:333-342
    DOI: http://doi.org/10.26710/jbsee.v12i2.3864
    as

    Download full text from publisher

    File URL: https://publishing.globalcsrc.org/ojs/index.php/jbsee/article/view/3864/2080
    Download Restriction: no
    File URL: https://libkey.io/http://doi.org/10.26710/jbsee.v12i2.3864?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    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:src:jbsree:v:12:y:2026:i:2:p:333-342. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Dr. Ghulam Shabir (email available below). General contact details of provider: https://edirc.repec.org/data/csrcmpk.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.