Symposia & Conferences
Permanent URI for this communityhttp://repository.kln.ac.lk/handle/123456789/10216
Browse
5 results
Search Results
Item The Impact of Interest Rate in Determining Exchange Rate: Revisiting Interest Rate Parity Theory(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Perera, P.R.M.R.; Silva, N.L.C.; Silva, N.K.L.The objective of this study is to examine the relationship between Interest rate and the Exchange rate and to find the effect of changes in Interest rate on Exchange rate volatilities. Exchange rate is sensitive to number of factors, where Interest rate is identified as a major factor (Ozun & Cifter , 2010). Central Bank of Sri Lanka provides quantitative evidence for the study, where Sri Lanka Inter-Bank Offer Rate (SLIBOR) constitutes the independent variable and US Dollar to Sri Lankan Rupee exchange rate represents dependent variable. Sample spreads through 4 years and contains daily data. Data set is proven to be normally distributed. Correlation and Linear Regression Model is used to ascertain relationships. Results of the study are consistent with Interest Rate Parity theory that discloses a strong positive relationship between Interest rate and Exchange rate. This study extends the literature on international financing and provides valuable information to decision makers in small open economies and to the academia.Item The Impact of Interest Rate in Determining Exchange Rate: Revisiting Interest Rate Parity Theory(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Perera, P.R.M.R.; Silva, N.L.C.; Silva, N.K.L.Objective of this study is to examine the relationship between Interest rate and the Exchange rate and to find the effect of changes in Interest rate on Exchange rate volatilities. Exchange rate is sensitive to number of factors, where interest rate is identified as a major factor. Central Bank of Sri Lanka provides quantitative evidence for the study, where Sri Lanka Inter-Bank Offer Rate (SLIBOR) constitutes the independent variable and US Dollar to Sri Lankan Rupee exchange rate represents dependent variable. Sample spreads through 4 years and contains daily data. Data set is proven to be normally distributed. Correlation and Linear Regression Model is used to ascertain relationships. Results of the study are consistent with Interest Rate Parity theory that discloses a strong positive relationship between Interest rate and Exchange rate. This study extends the literature on international financing and provides valuable information to decision makers in small open economies and to the academia.Item Relationship between Foreign Direct Investment and Exchange Rate(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Ranga, H.K.I.; Wijesinghe, M.R.P.Attracting Productive Foreign Direct Investments (FDI) to Sri Lankan economy is one of the main policies of Sri Lankan Government. Therefore, FDI inflows are considered as an important component of Sri Lankan Government’s intentions to foster economic growth. This research examines the long-run and short run effects on Sri Lanka’s FDI inflows from changes in Exchange Rate. Quarterly data from 2001 to 2012 are employed in this research. The ADF unit root test reveals non-stationary in exchange rate at 5 percent level of significance. Also according to the Heteroscadactisity Test there is no any Heteroscadactisity Error in the models. Simple Granger causality test was used to identify the causality between exchange rate and foreign direct investment inflows. Findings indicate that, there is a positive effect of Exchange rate to determine the short term Foreign Direct Investment and there is no any high impact of Exchange Rate to determine the Long Term Foreign Direct Investment inflows to Sri Lanka.Item The Effect of Foreign Exchange Market Returns on Stock Market Performance in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Perera, M.Exchange rate is one of the most influencing macroeconomic variables on stock returns in most of the countries. Thus, main objective of this study is to identify the effect of foreign exchange market returns on stock market performance in Sri Lanka. In order to evidence the study, researcher used publicly available secondary data from Colombo Stock Exchange and Central Bank of Sri Lanka. According to Guneratne (2011), exchange rate has a strong explanatory power in determining the stock market returns of the country. All share price index percentage changes are observed as dependent variable and the respective percentage changes of USD/LKR, EUR/LKR and GBP/LKR exchange rates as independent variables of this research. Exchange rate data for the period of 2002 to 2014 are considered for the research. A linear multiple regression model is developed to find the relationship between selected variables and following Noel & John (2009), correlation between variables are tested. Results of the research discloses that USD/LKR and GBP/LKR exchange rate returns have a strong explanatory power to All share price index (ASPI) returns. At the same time USD/LKR returns exhibits a negative correlation while other two exchange rates have a positive but weak correlation to ASPI returns. Findings of this research provide valuable information to investors in equity markets, to forecast potential stock returns with reference to exchange market fluctuations.Item Impact of Industrial Export Earnings Instability on Economic Growth in Sri Lanka(University of Kelaniya, 2014) Ubayachandra, E.G.; Rathnasooriya, W.A.S.The study on industrial export earnings in respect of economic growth in Sri Lanka is key research goal in considering the economic development and growth in a country. However, there is limited academic attention involved in this area. Accordingly, one aspect of this study was to fill up the research gap which is not touched up by other researchers so far. Resulting from the preliminary survey made regarding considering area, the researchers were able to identify a severe problem in this field. So, there is a continuous instability of industrial export earnings in Sri Lanka. Thus, the researchers intended to address why such a situation has taken place. Meanwhile, the study makes an attempt to achieve four objectives namely key objectives and specific objectives in this area and research questions raised in this study and this study was how far industrial exports instability makes influence on economic growth. A strong attempt was made to fill up the research gap none has sought so far. Accordingly, four objectives were set for getting a deeper understanding about the chosen field. Consistent with each objective, three research questions were also raised for more clarification. Meanwhile, based on the relationship among variables represented in the conceptual model, five hypotheses were formulated. And also, for the purpose of getting the study systematic, better methodological choice was also made and accordingly the deductive method was used for postulating the theme of the study. In addition both qualitative and quantitative perspectives were applied in analyzing the data. For presenting the data mostly bar charts, graphical presentations and tabulations were used to analyze the data. Correlation analysis was employed to test the data statistically. Based on the test results, ultimate conclusion including the findings was made. The major finding in this study is that there is a chronic instability of industrial export earnings in Sri Lanka. On the ground of this situation, the researchers have produced certain policy implications in support of eliminating these poor situation. Additionally, at the end of the study further researchable areas related to considering field have been pointed out for facilitating to those who are interested in doing research in this area.