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The Movement of Exchange Rate and Expected Income: Case of South Africa

Author

Listed:
  • Simiso MSOMI
  • Harold NGALAWA

    (University of KwaZulu Natal
    University of KwaZulu Natal)

Abstract

Many studies have investigated the impact of expectations on the exchange rates. However, it remains a challenge linking the exchange rates to its fundamentals. This study seeks to determine the impact of expectations of future income on the exchange rates behaviour. In this study, we employ the Bayesian VAR method. The study finds that the expectations of income have effects on the exchange rate behaviour. Furthermore, the exchange rates behaviour is asymmetric.

Suggested Citation

  • Simiso MSOMI & Harold NGALAWA, 2023. "The Movement of Exchange Rate and Expected Income: Case of South Africa," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 7(2), pages 65-89.
    • Handle: RePEc:trp:01jefa:jefa0068
    DOI: 10.1991/jefa.v7i2.a63
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    More about this item

    Keywords

    Expectations; Income; Output; Growth; Exchange Rates; FDI.;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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