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The Impacts of the Political Uncertainty on the Currency Exchange Rate

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  • Mohamad Youness

    (The Bucharest University of Economic Studies)

Abstract

This paper examines the impacts of political uncertainty on the currency exchange rate, taking the fluctuation of the LBP exchange rate against USD dollar in the black market as a practical case. It shed light on the most important political events and decisions that happened in Lebanon and the region during the period (2019-2021) and linked it directly to the currency exchange rate, to show the impacts of the political instability on the LBP/USD exchange rate. We depend on the daily observations of the LBP exchange rate in the central bank and black market to perform empirical tests and regression models and we gathered the political events and news from the National News Agency (NNA). The results show that political uncertainty and instability have a direct impact on the currency exchange rate.

Suggested Citation

  • Mohamad Youness, 2022. "The Impacts of the Political Uncertainty on the Currency Exchange Rate," Technium Social Sciences Journal, Technium Science, vol. 28(1), pages 414-424, February.
    • Handle: RePEc:tec:journl:v:28:y:2022:i:1:p:414-424
    DOI: 10.47577/tssj.v28i1.5788
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    References listed on IDEAS

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    1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
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    3. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    4. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    5. Blomberg, S. Brock & Hess, Gregory D., 1997. "Politics and exchange rate forecasts," Journal of International Economics, Elsevier, vol. 43(1-2), pages 189-205, August.
    6. Lobo, Bento J. & Tufte, David, 1998. "Exchange Rate Volatility: Does Politics Matter?," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 351-365, April.
    7. Allan Drazen, 2000. "Political Contagion in Currency Crises," NBER Chapters, in: Currency Crises, pages 47-67, National Bureau of Economic Research, Inc.
    8. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
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    Cited by:

    1. Kamal K. Jawad Al-Shimari & Riyad Rahim Reda & Qasim Mohammed Hammood, 2022. "Analysis of the relationship between the exchange rate and stock market indicators: Evidence from Iraq," Technium Social Sciences Journal, Technium Science, vol. 29(1), pages 285-296, March.

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    More about this item

    Keywords

    Political Uncertainty; Exchange Rate; Lebanese Pound; USD dollar;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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