Impact of Inflation, Exchange Rate and Interest Rate on the Private Sector Credit of Pakistan
Abstract
The paper analyzed the long-term and short-term impact of interest rate, exchange rate and inflation on the private sector credit of Pakistan during the period from 1975 to 2018. To test the stationarity of data Augmented Dick Fuller (ADF) Test was applied. While the main model to explore the long-term and short-term dependence was based on Auto Regressive Distribution Lag (ARDL) Model. The results suggested no effect of exchange rate on private sector credit, while inflation has significant as well as positive impact on Private Sector Credit (PSC) in long as well as short run. Lastly, the most important dependence i.e. interest effect on PSC; depicted negative impact in both short and long term.
Downloads
Article Analytics Summary
References
Abel, J. a. (2020). Economics during Pandemic. Economist, 42-43.
Alhem. (2020). COVID-19 and Banks. Washington Post. USA.
Akkina and Celebi, M. (2011). Determinants of bank credit in Pakistan. A supply side approach. 2nd International Conference on Business Managemen Paul Krugman in NY times in 2008
Cochrane, J. (2020). Impact of Pandemic on financial sector. The Real Economics, 12(2), 25-38.
Duffin, E. (2020). Impact of the coronavirus pandemic on the global economy - Statistics & Facts. Statista, 41(7), 28-42.
IMF. (2020, April 14). World Economic Outlook: IMF. Retrieved from IMF: https://www.imf.org/en/publications/weo
Mauro, R. B. (2020). Recent history of pandemics. In R. B. Mauro, Economics in COVID-19, 18(3), 5-12.
Nove, K.A. (2019). Bank run in Pandemics. Journal of Management, 24(4), 48-52.
Gupta, K. L. (1987). Lending Rate effect on Private Sector Credit (PSC) (Vol. 69). The Review of Economics and Statistics, 412-421 DOI: https://doi.org/10.2307/1927238
Khawaja and Din (2012), PSC determinants 1981-2010, Journal of PIDE, 24(3), 133-50.
Lawrence and Christoper (2014), Effect of interest rate on Credit in Malaysia, Journal of Econometrics.
Mishkin, A. (2012). Is MP effective during crisis? In the Journal of Empirical Economics, USA.
SBP. (2020). Impact of COVID-19. Retrieved from SBP: http://www.sbp.org.pk/
SBP. (2020). Trends and Development March 2020. Retrieved from SBP : www.sbp.org.pk
Schoenholtz, S. C. (2020). Banks and Other Financial Institutions. In A. a. John, Economics at times of COVID-19 (p. 18).
Stiller, M. (2020). Liquidity of Banks in COVID-19. IDC - Analyze the Future, 102-119.
Sulman, M. (2020). Impact of COVID on international trade economics. Reserach gate, 332-346.
Copyright (c) 2020 Muhammad Umair Ali, Saliha Gul Abbasi, Mazhar Abbas, Ghulam Dastgeer
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
CSRC Publishing and JAFEE adhere to Creative Commons Attribution-Non Commercial 4.0 International License. The authors, submitting and publishing in the Journal of Accounting and Finance in Emerging Economies published by CSRC Publishing, retain the copyright of their work and give the journal right to publish their work agreeing to the licensing policy under Creative Common Attribution-Non Commercial (NC-BY-NC 4.0) International. Under this license, the published authors let others remix, tweak, and build upon their work non-commercially. Yet all the other authors using the content of CSRC Publishing are required to cite author(s), journal name and publisher in their work. CSRC Publishing and JAFEE follow an Open Access Policy for copyright and licensing.
