Macroeconomic Influence on the Balance of Payments of Bangladesh

Abstract

The present study investigated how the macroeconomic factors have affected the balance of payments (BOP) of Bangladesh using the time series data from 1990 to 2021. The study found that balance of payments has been greatly affected by the exchange rate of currencies (EXR), growth rate of the gross domestic product (GDP), the foreign direct investment (FDI) and the balance of trade (BOT) during the period. Various pre and post estimation tools and techniques have been employed followed by running of regression models utilizing the STATA software to confirm the model suitability and to consider the model outcomes to the researchers, policy makers and the enthusiastic readers for further studies and decision making. The study suggests that the efficient implementation of government policies is vital in determining how the economy of a nation is formed and to perform. It emphasizes how important it is to create a friendly atmosphere for foreign investments because these investments could have an impact on the BOP and economic growth of the country.