Exchange Rate and Macroeconomic Performance in South Asian Region

Abstract

The aim of this study was to throw light on the relationship between the Exchange Rate and Macro Economic Performance in South Asian Region (Afghanistan, Bangladesh, Bhutan, India and Sri Lanka). The results indicated that there was causal relationship (unidirectional) between Exchange Rate and Imports, Government Total Expenditure and Total Investment in Bangladesh. The correlation analysis also confirmed that Bangladesh is only country, which recorded positive correlation between Exchange Rate and Macro Economic Performance (except Total Investment) of South Asia Region. The findings of this study would be useful to the retail investors and policymakers, to monitor the exchange rate movements.